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HOLDING AND SUBSIDARY COMPANY

This query is : Resolved 
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(Querist)
23 April 2010 HI ALL,,,

CAN A HOLDING COMPANY SELLS ITS STOCK TO ITS 100% SUBSIDARY COMPANY.

WHAT PRECAUTIONS ARE REQUIRED TO BE TAKEN BY BOTH THE COMPANIES.

PLEASE REPLY

THANKS ALLL
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HARESH

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HARESH (Querist)
23 April 2010 PLEASE REPLY FROM COMPANY LAW VIEW POINT
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Rasesh

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Rasesh (Expert)
25 April 2010 A subsidiary company cannot hold voting rights in the holding company. If the stock is convertible into shares, then shares cannot be issued by holding company to subsidiary company. Please refer Sec. 42 of the Companies Act.
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