Definition of subsidiary

This query is : Resolved 
 

(Querist)
25 March 2008

Please clarify! The Companies Act,1956 defines subsidiary.A company which holds more than 50% of the voting power or equity capital of other company,that other company is the subsidiary of the first mentioned company.But if a company holds just 50%,then would that be considered as subsidiary!!!


Vikas Garg (Expert)
25 March 2008

I just want to clarify that its 50% or more.

Dharmishta Tank (Querist)
25 March 2008

it is exactly 50%

CA Praveen Chopra (Expert)
25 March 2008

As per section 4(1)(b)(ii) of the companies act 1956, if a company holds more than half in the nominal value of equity share capital of another company,than such another company is a subsidiary of first mentioned company.The wording of section i.e.more than half,clearly says that it is more than 50% & not exactly 50% even.

Devendra Mishra (Expert)
25 March 2008

> then 50%

R.V.RAO (Expert)
25 March 2008

IT IS MORE THAN 50% OF SHARE CAPITAL OR VOTING POWER WHICH IS REQUIRED TO BE HELD BY ANOTHER COMPANY TO BECOME A SUBSIDIARY OF THAT COMPANY AS PER SEC 4 OF COS ACT.
R.V.RAO

CA Saurabh Maheshwari (Expert)
25 March 2008

MORE THAN 50 % DOES NOT AT ALL MEANS 50 %

MANAS ROUT (Expert)
25 March 2008

it should be more than 50%.



You need to be the querist or approved CAclub expert to take part in this query .


Click here to login now



Similar Resolved Queries :






× Online Coaching My Enrolled Courses
Articles Forum News Experts Exams Share Files Income Tax Accounts Career Corporate Law Service Tax Video Judgements Rewards Top Members Events Albums Find Friends Featured Feed Scorecard Bookmarks Mock Test Poll Notification Knowledge Finder Coaching Institutes Trainee Corner Jobs
close x
  SHARE THIS