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18. Types of Proprietary Company


Types of Proprietary Company

 

This section talks about the criteria used to recognise different categories of proprietary limited companies.
 

45A – Proprietary companies


Company can be registered u/s 118 or 601BD. A company can convert to a proprietary company under part 2B.7.

Company must:

                a. Be limited by shares or be an unlimited company with a share capital.

                b. Have no more than 50 non-employee shareholders.

                c. Not do anything that would require disclosure to investors under chapter 6D.
 

Types of Proprietary companies


Small proprietary company – A company is considered to be a small proprietary company if it satisfies at least 2 of the following conditions:

1.       The consolidated revenue for the financial year is less than $25 million, or any amount specified by the legislation for this purpose.

2.       Value of consolidated gross assets at the end of the financial year of the company and the entities it controls is less than $12.5 million, or any other amount prescribed by the legislation for this paragraph

3.       The company and the entities it controls (if any) have fewer than 50, or any other number prescribed by the regulations for the purposes of this paragraph, employees at the end of the financial year.

Large proprietary company – If it satisfies any 2 of the following conditions:

1.       Consolidated revenue for the financial year of the company and the entities it controls (if any) is $25 million, or any other amount prescribed by the regulation.

2.       The value of the consolidated gross assets at the end of the financial year and the entities it controls (if any) is $12.5 million, or any other amount prescribed by the regulations for the purpose of this paragraph.

3.       The company and the entities it controls (if any) have 50, or any other prescribed by the regulation for the purposes of this paragraph.
 

What does it mean by “when a company controls an entity?”


Whether a proprietary company controls an entity is to be decided in accordance with the accounting standards made for the purposes of paragraph 295(2)(b)
 

Counting employees


In counting for the purposes of subsections (2) and (3), take part time employees into account as an appropriate fraction of a full time equivalent.

 



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