Definition of group company

Company Secretary

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)

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

 
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Company Secretary

Refer Accounting Standard - 18.

 
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Company Secretary

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...

thnx

 
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Company Secretary

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.

 
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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 .

 
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CMA - CA - IPCC

Group Companies means the companies promoted by same promotor.

 
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Semi-Qualified

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

 
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