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Defination of associate company

12 March 2013

Dear Friends,

Kindly let me know about the defination of "Associate Company'". I know that the said defination is not mentioned in the Companies Act 1956 and its meaning is mentioned as per AS-18, AS-23 upto some extent. So Please provide some clear idea to know and to understand the Associate Company concept. Thanx in advance.

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POOJA (ARTICLE ASSISTANT) (169 Points)
Replied 13 March 2013

A company is associated with another company at a particular time if, at that time or at any other time within the preceding 12 months: one company has control of the other, or both companies are under the control of the same person or group of persons. So, two companies are associated when the same person or group of persons can control both, either personally, or via their interests in other corporate shareholders. Control is determined according to any of the following tests: % share ownership Voting power Any rights Entitlement to assets on winding up (loan creditors).