X, a publisher, agrees to publish a book at his own expense written by Y and to pay Y, half of the net profit. Does this create a relationship of…

(a) (i) “Inactive company” means a company which has not been carrying on any business or operation or has not made any significant accounting transaction during the last two financial years or has not filed financial statements and annual returns during the last two financial years. [Explanation (i) to Section 455 of the Companies Act,2013]. “Significant accounting transaction” means any transaction other than— (a) payment of fees by a company to the Registrar; (b) payments made by it to fulfil the requirements of this Act or any other law; (c) allotment of shares to fulfil the requirements of this Act; and (d) payments for maintenance of its office and records. [Explanation (ii) to Section 455 of the Companies Act,2013] In the instant case, MTK Private Limited was registered on 5th January, 2022 and did not start its business till31st July, 2024. Since the Company has not started its business and a period of more than two years has already elapsed, it will be treated as an inactive company. (ii) Small Company: Small company given under the Section 2 (85) of the Companies Act,2013 which means a company, other than a public company: (i) paid-up share capital of which does not exceed4crores rupees or such higher amount as may be prescribed which shall not be more than ten crore rupees; and (ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed40crores rupees or such higher amount as may be prescribed which shall not be more than one hundred crore rupees: Exceptions: This clause shall not apply to: (A) a holding company or a subsidiary company; (B) a company registered under section 8; or (C) a company or body corporate governed by any special Act. In the given case, although the paid- up capital and turnover of Aaradhya Cosmetics Private Ltd. is within the terms of small company but, Aaradhya Cosmetics Private Limited (ACPL) is the holding company of Pooja Fashions Private Limited (PFPL) and as per the proviso (A) to Section 2 (85) , holding company shall not be treated a small company. Hence ACPL Cosmetics Private Ltd. cannot avail the status of a small company. Contention of directors of ACPL is incorrect. (iii) Government Company [Section 2 (45) ]: Government Company means any company in which not less than51% of the paid- up share capital is held by - the Central Government, orby any State Government or Governments, orpartly by the Central Government and partly by one or more State Governments. and the Section includes a Company which is a Subsidiary Company of such a Government Company. In the instant case, Abhinav Natural Gases Ltd. (ANGL) cannot be tagged as a Government Company as the total holding of Central Government and State Government is 70.30 crores (₹ 40.10 crores +30.20 crores) which is less than51% of the paid -up share capital of ANGL i.e.71.40 crores (51% of 140crores). Hence ANGL shall not be tagged as Government company. Directors of ANGL cannot quote it as Government Company.