As on 1st August 2017, A Ltd had three layers of subsidiaries. Discuss: Whether A Ltd can continue to have such layers of subsidiaries?

The Companies (Restriction on Number of Layers) Rules, 2017 has been published in the Official Gazette on 20th September 2017. Effective from this date, no company, other than a company belonging to a class specified in sub-rule (2), shall have more than two layers of subsidiaries. Provided that the provisions of this sub-rule shall not affect a company from acquiring a company incorporated outside India with subsidiaries beyond two layers as per the laws of such country. Provided further that for computing the number of layers under this Rule, one layer which consists of one or more wholly owned subsidiary or subsidiaries are not taken in to account. Hence, A Ltd can't continue with three layers of subsidiaries unless it can avail exemptions / conditions stipulated above.