Company X has a shareholder named A who holds 99% of the shareholding in Company X.
The mother & father of A holds 26% each shareholding in Company Y.
Whether Company X & Y are related parties.
Plz reply asap
Thanks in anticipation.
Believe in Yourself (article) (139 Points)
26 March 2014Company X has a shareholder named A who holds 99% of the shareholding in Company X.
The mother & father of A holds 26% each shareholding in Company Y.
Whether Company X & Y are related parties.
Plz reply asap
Thanks in anticipation.
M.Sathish Kumar
(CA Practice)
(34 Points)
Replied 02 April 2014
Yes,
Company X and Y are related parties as per AS 18 refer para 3 (c)
Mr. A holding 99% equity in Company X and his relatives are holding more than 20% (significant influence) hence both are considered to be related party
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