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Discussion > Corporate Law >

Definition of group company

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Company Secretary

[ Scorecard : 1659]
Posted On 21 June 2011 at 12:16 Report Abuse

What is the definition of group companies and associate companies ? What is the difference between the two?

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CS (Member) CWA (Inter-1 cleared)t)

[ Scorecard : 829]
Posted On 21 June 2011 at 13:48

These are all informal words not defined anywhere. But we call all companies are uder a group, associates, affiliates etc when its under the control of same promoters may be by virtue of shareholding or directorship

Rakesh Dhanuka
Company Secretary

[ Scorecard : 466]
Posted On 21 June 2011 at 15:08

Refer Accounting Standard - 18.

Company Secretary

[ Scorecard : 165]
Posted On 21 June 2011 at 15:16

Group companies are companies promoted by same promoters and/or any promoter group i.e relatives as defined under co.'s act. It is not defined anywhere but it can be recognised by directors/shareholders pattern or even the common name of group used, if any.

Associate company is also same but it is called associate when there are any transactions between such group companies which are known as related party transactions under the act.

Correct me if wrong...


Sumit Jaiswal
Company Secretary

[ Scorecard : 668]
Posted On 21 June 2011 at 15:25

The term group company is not defined. It simply means a set of companies controlled by a common apex company. To call a company an associate of another, the another company must have shares in the first mentioned company atleast 26% but not exceeding 50% (AS 18).

Other views welcome.

CA Sunil Agarwal

[ Scorecard : 368]
Posted On 21 June 2011 at 19:04

i want to coorect mr sumit as per AS 18 Associate mean where one company control other company 20 percent  paid up share capital but not exceedind 50 percent .

Aryan Sharma

[ Scorecard : 44]
Posted On 22 June 2011 at 11:19

Group Companies means the companies promoted by same promotor.

ankit jain

[ Scorecard : 30]
Posted On 11 February 2012 at 16:53

Can persons specified under section 40A(2)(b) be the group companies?

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