(i) Tycoon Private Limited is the holding company of Glassware Private Limited. As per the last profit and loss account for the year ending 31 st…

Provisions of Law: (i) As per section 2(85) of the Companies Act, 2013, Small Company means a company, other than a public company: (i) paid-up share capital of which does not exceed ten crore rupees, and (ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed one hundred crore rupees: Provided that nothing in this clause shall 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. (ii) Perpetual Succession – A company on incorporation becomes a separate legal entity. It is an artificial legal person and have perpetual succession which means even if all the members of a company die, the company still continues to exist. It has permanent existence. The existence of a company is independent of the lives of its members. It has a perpetual succession. In this problem, the company will continue as a legal entity. The company's existence is in no way affected by the death of all its members. Analysis: (i) In the instant case, as per the last profit and loss account for the year ending 31 st March, 2023 of Glassware Private Limited, its turnover was to the extent of ₹ 80 crore, and paid-up share capital was ₹ 8 crore. Though Glassware Private Limited, as per the turnover and paid-up share capital norms, qualifies for the status of a ‘small company' but it cannot be categorized as a 'small company' because it is the subsidiary of another company (Tycoon Private Limited). (ii) In the Flower Fans Private Limited, even though all 5 members died in the boat accident, the company, being a separate legal entity with perpetual succession, will continue to exist. The death of its members does not affect its legal existence. Conclusion: (i) The contention of the Company Secretary is correct. Glassware Private Limited cannot be categorized as a small company because it is a subsidiary of Tycoon Private Limited, despite meeting the paid-up share capital and turnover criteria. (ii) Flower Fans Private Limited will continue to exist under the provisions of the Companies Act, 2013, due to the principle of perpetual succession, even after the death of all its members.