The concept of private company becoming a public company is stated under sec.43 A of Indian Companies Amendment Act 1960.
The following were the provisions of section 43 A.
· Where not less than 25% of the paid-up share capital of a private company is held by one or more bodies corporate, such a private company shall become a public company from the date on which such 25% is held by body corporate. (section 43 A (1)
· Where the average annual turnover of a private company is not less than Rs. 10 crores during the relevant period, such a private company shall become a public company after the expiry of the period of three months from the last day of the relevant period when accounts show the said average annual turnover. (section 43 A (1A)
· When a Private company holds not less than 25% of the paid up share capital of a public company, the private company shall become a public company from the date on which the private company holds such 25% (section 43A (1B)
· When a private company accepts, after an invitation is made by an advertisement or renews deposits from the public other than its members, directors or their relatives, such private company shall become a public company (section 43a 1C)
The above provisions of section 43A shall not apply on or after the 31-12-2000 (section 43A (11). Deemed concept of a public limited company on account of the above four factors is abolished (as per Companies Amendment Act 2000).
