Section 43A was introduced in 1960, in which a private company is converted in to a deemed public company with the fulfillment of some condition. A deemed public company is neither a private company nor it is a public company but a company, in a third category.

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According to section 43A, a private company will be deemed as public company in the following case:-

  1. When the private company holds 25% or more of the paid up capital of a public company
  2. When the average turnover for the last three consecutive years is Rs. 25 cores or more.
  3. When the deposits are invited from the public through an advertisement.
  4. When the private company has public company as its shareholders holding in aggregate 25% or more of it’s paid up share capital.

There are some other features also with the help of which a private company will be deemed to become a public company

  1. The number of members may be below the statutory minimum of 7 members required for a company.
  2. A statement in lieu of prospectus is to be filed; when section 44 of the Act is not applicable.
  3. Their article may contain provisions of section 3, which related to private company.

By virtue of section 43A of the Act, all the provisions of the Act relating to public company will apply to companies becoming public company.

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