MCA vide Public Notice No. 3/3/2017-CL-I on Wednesday, 28th June, 2017 has invited suggestions / comments on draft notification/rules on Companies (Specification of Definitions Details) Amendment Rules, 2017 latest by 20th July, 2017, through email at firstname.lastname@example.org.
Vide said Notice, it is proposed for insertion of new Rule 5 relating to ‘Restriction on number of layers for certain classes of holding companies’ prospectively.
The said rule proposed following:
- Holding Company shall not have more than 2 layers of subsidiaries.
- Subsidiary incorporated in a country outside India and one layer which is represented by a wholly owned subsidiary shall not to be counted for above limit.
- Specified class of companies on which above limit of 2 layers shall not apply (i.e. Banking, NBFC, Insurance & Government Company)
- The restriction u/s 186(1) on investment through not more than two layers of investment companies will continue to apply and if it is subsidiary, the same is to be counted for the purpose of layer requirement.
- The said rule apply prospectively, hence where holding company have excess number of subsidiaries shall intimate to ROC in Form SDD-1 within 3 months of date of deployment on MCA portal and shall not have any additional layer of subsidiaries over and above the layers existing on such date.
The said Public Notice can be accessed at the following link:PublicNotice_Draft_Co(Def.)AmndRules2017_28.06.2017