Section 2 (52) of new companies Act 2013

[suhasini B]

Dear Friends,

Would like to interpret section 2 subclause (52) definition of "listed Company" as per the Companies Act,2013 the definition reads as follows: listed company means a company which has any of its securities listed on any recognised stock Exchange.

So if we go by Securities Contracts regulation act, definition of Securities is as follows:

Shares, scrips, stocks, bonds, debentures, debenture stock or other marketable

securities of a like nature in or of any incorporated company or other body

corporate;

My query is if we are a private limited company and our Non convertible Debentures are listed with Bombay stock Exchange, are we a listed company.


Best Regards,
Suhasini Ashok.B

[Bhavani Prasad]

Dear Friend.,

According to me Interpretation of Sec 2(52) goes like this .....

In the new Companies Act, 2013 the word public has been removed from the definition,beside that else everything is same.

According to this definition only a PUBLIC company can be a listed company.

So even if your Private Ltd co has NCD's and are listed with BSE , its not a LISTED ENTITY

Contrary views are welcome.

Regards

CS Bhavani Prasad C N
Company Secretary
098665 19059

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[Usha Ganapathy Subramanian]

Dear Friends,

We may tend to apply the situation conceived in the CA 1956, a provision of law must be first interpreted using the Literal Rule of Interpretation, which is the foremost rule of interpretation.

Going by that we are constrained to interpret that a private limited company which has its NCDs listed on BSE will be a "listed company" for the limited purpose of the provisions of CA 2013.

Further, I think unless and until it is proved that the change of the definition from "listed public company" to "listed company"  and the removal of the word "public" in the definition is only cosmetic and that it was not the intention of the legislation, and until a clarification or a ruling comes out, we have to go by the strict interpretation.

I request the learned members to please throw light on this case.

Thanks & Regards,

G Usha

[CS A Rengarajan]

yes i fully agree with views of Mr.Bhavani prasad since private
limited has got maximum no of members 200 and it cannot go beyond
the numbers. hence it will not be treated as public limited company.

Why the companies act 2013 insisted that we need to adhere certain
procedural formalities while raising funds for private limited company
which itselt cannot constitute as listed company

regards

On Mon, Nov 11, 2013 at 4:39 PM, Bhavani Prasad <cnb...@gmail.com> wrote:

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CS A Rengarajan
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[CS A Rengarajan]

Dear all

Members views solicited on this issue since different interpretations are coming from member

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[Usha Ganapathy Subramanian]

Dear Members,

This paradox is also drawn attention in an article of the Businessworld.

The link is:  http://www.businessworld.in/news/web-exclusives/the-new-companies-act-a-great-promise/1105990/page-1.html (Para 3 of the Article). 

Members' views are solicited.

Thanks & Regards,

G Usha

On Mon, Nov 11, 2013 at 4:53 PM, CS A Rengarajan <csaren...@gmail.com> wrote:

[BINDU MADHAVA]

I think it is necessary to consider section  2(68)(iii) also

regards
Bindu Madhava K G

[Usha Ganapathy Subramanian]

Dear Sir,

Yes, it is absolutely necessary to keep in mind the definition of a private company which prohibits invitation to the public to subscribe for any securities. But what about those companies which have already listed their NCDs like the one Ms. Suhasini has stated? My humble view is that although the primary rule of interpretation is the literal (strict) interpretation, such an interpretation of Section 2(52) will lead to many hardships and hence, the interpretation may be liberal/relaxed.

My only question is:

Will the liberal / relaxed interpretation that the definition of listed company does not include a private company which has already listed its NCDs is valid in the eyes of law? And whether such relaxation will automatically apply in view of the hardship involved in literal interpretation (without any circular or ruling backing it)?

Thanks & Regards,

G Usha 

[Jayashree Iyer]

Dear All

 

A point of uncertainty lies in the definition of a listed company. Going by the plain reading of 2(52) of the Companies Act, 2013, a company with any listed security will be treated as a listed entity. So an unlisted private company, which may have listed its NCDs, will become a listed company.  In my opinion, the word 'public' has been removed under the Companies Act 2013 to make it clear that even the private companies having its debt instruments,etc listed in a stock exchange would be treated at par with the listed companies.

 

Regards

Jayashree

[Bhavani Prasad]

I agree with Jayashree mam,this could be the intention of legislature too,but clarity need to be given and a clear distinction should be made between Listed Public Ltd co and (Un)listed Pvt co

Regards

CS Bhavani Prasad C N
Company Secretary
098665 19059

[Neha Sharma]

Respected Seniors,

Please tell me where it is given that a pvt. Company can list its Non
convertible debentures in stock exchange.

[Usha Ganapathy Subramanian]

Dear Ms Sharma,

The question could be more like where is it given that the privately placed debt securities of private limited companies should not be listed? Companies Act 1956 prohibits invitation to the public to subscribe to debentures but to my limited knowledge, it does not prohibit listing of privately placed non-convertible debentures. Privately placed NCDs have been listed in the stock exchanges for quite some time now. The listing of privately placed securities is done vide SEBI (Issue and listing of debt securities) Regulations. You can find the details of some privately placed debt securities of private limited companies in BSE in the following link: http://www.bseindia.com/markets/debt/memorandum_data.aspx?expandable=3

This is a recent observation for me too and I am just sharing my views based on real-world events and theoretical knowledge. However, I do not have expert knowledge on this and I request members to correct me if I am wrong.

Thanks & Regards,

G Usha

[Jayashree Chandrasekaran]

Dear friends,
Yes...this question is quite thought provoking....my query is what is
the advantage to the private limited company to have its NCDs listed?
Jayashree

C.JAYASHREE
PARTNER
S.GANESH&ASSOCIATES
CHENNAI
98840 17120

[Jayashree Iyer]

Dear All
 
Going by the plain reading of 2(52) of the Companies Act, 2013, a company with any listed security will be treated as a listed entity. So an unlisted private company, which may have listed its NCDs, will become a listed company.  In my opinion, the word 'public' has been removed under the Companies Act 2013 to make it clear that even the private companies having its debt instruments,etc listed in a stock exchange would be treated at par with the listed companies.

 

The advantages of listing NCD is that it becomes tradable in the market. Again, FIIs and QFIs can invest only in listed NCDs.  Hence it becomes necessary to list the NCDs.

 

Regards

Jayashree
 
Regards

[Usha Ganapathy Subramanian]

I agree with Ms. Jayashree Iyer. 

Thanks & Regards,

G Usha

[Neha Sharma]

Thanks all senior members to give their valueable views.

[Pankaj]

Dear Friends,

As after reading the simple wordings of the definition of 'Listed Company' under Section 2(52), which says:

“listed company” means a company which has any of its securities listed on any recognised stock exchange

Is it means the Companies listed on National Stock Exchange and Bombay Stock Exchange only?

If so, then all the other Companies listed in any other stock exchange (Regional Stock Exchange ??) shall be out of the purview of this definition and most of the provisions of the Act.

Please help me to understand, what is the meaning of recognised stock exchange (or what is the meaning of regional stock exchange) IN THE STRICT SENSE OF THE LAW?

[Rajesh]

I completely agree with Mrs. Usha. When the provision is clear,
literal interpretation is the only option available to us. Even
though literal interpretation could cause hardship, one cannot resort
to liberal interpretation. this is the Golden Rule of Interpretation.

So the only option available to us is to wait for some clarification.


Rgds,
Rajesh

On 4/11/14, Pankaj <pank...@hotmail.com> wrote:
> Dear Friends,
>

> As after reading the simple wordings of the definition of *'Listed
> Company' *under Section 2(52), which says:
>
> *"listed company" means a company which has any of its securities listed on
>
> any recognised stock exchange*

>
>
> Is it means the Companies listed on National Stock Exchange and Bombay
> Stock Exchange only?
>
> If so, then all the other Companies listed in any other stock exchange
> (Regional Stock Exchange ??) shall be out of the purview of this definition
>
> and most of the provisions of the Act.
>
> Please help me to understand, what is the meaning of recognised stock

> exchange (or what is the meaning of regional stock exchange) *IN THE STRICT
>
> SENSE OF THE LAW?*

>
>
> On Monday, 11 November 2013 16:14:18 UTC+5:30, suhasini B wrote:
>>
>> Dear Friends,
>>
>>
>> Would like to interpret section 2 subclause (52) definition of "listed
>> Company" as per the Companies Act,2013 the definition reads as follows:
>> listed company means a company which has any of its securities listed on
>> any recognised stock Exchange.
>>
>> So if we go by Securities Contracts regulation act, definition of
>> Securities is as follows:
>>
>> Shares, scrips, stocks, bonds, debentures, debenture stock or other
>> marketable
>> securities of a like nature in or of any incorporated company or other
>> body
>> corporate;
>>
>> My query is if we are a private limited company and our Non convertible
>> Debentures are listed with Bombay stock Exchange, are we a listed
>> company.
>>
>>
>> Best Regards,
>> Suhasini Ashok.B
>>
>

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[Jude Dsouza]

No Matter your Company is a private Company, if any of the securities are listed, you are called as Listed Company under the companies act, 2013.

[panka...@gmail.com]

But what matters is where the securities are listed. What is the definition of Recognised Stock Exchange as pointed out in the definition of Listed Company under Companies Act, 2013.

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From: Jude Dsouza <dsd...@gmail.com>

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Date: Fri, 11 Apr 2014 08:00:47 -0700 (PDT)

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ReplyTo: csmy...@googlegroups.com

Cc: CS Group<company_...@yahoogroups.com>; suhasini B<suha_...@yahoo.co.in>; <suha_...@yahoo.co.in>

Subject: [CSMysore] Re: Section 2 (52) of new companies Act 2013

No Matter your Company is a private Company, if any of the securities are listed, you are called as Listed Company under the companies act, 2013.

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[Deepika]

In case of a asset management company private limited , the etf schemes are listed on nse so does it mean that the amc fall under the criteria of sec 2 (52). Pls highlight

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