Associate and group company
This query is : Resolved
Mehak Bansal
(Querist)
31 August 2014
Can anyone please explain me the concept of associate and group company with examples
CS Mitesh Mehta
(Expert)
01 September 2014
As per section 2(6) of the Companies Act 2013, “associate company”, in relation to another company, means a company in
which that other company has a significant influence, but which is not a subsidiary
company of the company having such influence and includes a joint venture company.
Explanation.—For the purposes of this clause, “significant influence” means
control of at least twenty per cent. of total share capital, or of business decisions under an agreement;
The term Group is not defined under the companies act. However Two or more corporations that are related through common ownership in general terms means group company. Group consists of a parent corporation and one or more subsidiary corporations.
which that other company has a significant influence, but which is not a subsidiary
company of the company having such influence and includes a joint venture company.
Explanation.—For the purposes of this clause, “significant influence” means
control of at least twenty per cent. of total share capital, or of business decisions under an agreement;
The term Group is not defined under the companies act. However Two or more corporations that are related through common ownership in general terms means group company. Group consists of a parent corporation and one or more subsidiary corporations.
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