CA Inter P2 · Chapter 1 · Question 4 of 9
Megha Ltd is a subsidiary of Trident Ltd, a public company. The articles of Megha Ltd contain all the restrictions applicable to a private company. Megha Ltd will be treated as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) A public company, because a subsidiary of a public company is deemed to be a public company
Explanation
The proviso to section 2(71) states that a company which is a subsidiary of a company that is not a private company is deemed to be a public company for the purposes of the Act. This applies even if the subsidiary's articles keep the restrictions of a private company.
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