The Companies Act, 1956
346. CHANGES IN CONSTITUTION OF MANAGING AGENCY, FIRM OR CORPORATION TO BE APPROVED BY CENTRAL GOVERNMENT.
(1) Notwithstanding anything to the contrary contained in any other provision of this Act, where the managing agent of a public company, or of a private company which is a subsidiary of a public company, is a firm or body corporate and any change takes place in the constitution of the firm or body corporate, the managing agent shall cease to act as such on the expiry of six months from the date on which the change takes place or such further time as the Central Government may (whether before or after the expiry of the six months) allow in that behalf, unless the approval of the Central Government has been accorded before the expiry of six months aforesaid or where further time has been allowed by the Central Government, before the expiry of that time to the changedconstitution of the firm or body corporate.
Explanation : For the purposes aforesaid, a change in the constitution of a body corporate means -(a) its conversion from a private to a public company, or from a public to a private company;(b) any change among the directors or managers of the corporation whether caused by the death or retirement of a director or manager, the appointment of a new director or manager, or otherwise;(c) any change in the ownership of shares in the body corporate or in the case of a body corporate not having a share capital, any change in its membership;and where the managing agent, being a body corporate is a subsidiary of another body corporate, includes a change in the constitution of that other body corporate within the meaning of clause (a), clause (b) or clause (c).
(2) Where the managing agent is a body corporate (whether or not it is a subsidiary of another body corporate) and its shares are for the time being dealt in, or quoted on, a recognised stock exchange, a change in the ownership of its shares, orwhere a managing agent being a body corporate is a subsidiary of another body corporate and the shares of the other body corporate are for the time being dealt in, or quoted on, a recognised stock exchange, a change in the ownership of the shares of the other body corporate,shall not be deemed to be a change in the constitution of the managing agent within the meaning and for the purposes of sub-section (1), unless the Central Government, by notification in the Official Gazette, otherwise directs :
Provided that no such notification shall be issued in respect of any such, or such other, body corporate as aforesaid, unless the Central Government is of the opinion that any change in the ownership of its shares has taken place or is likely to take place, which has affected or is likely to affect prejudicially the affairs of the any company which is being managed by the managing agent.