Holding and susidiary

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SUMIT SAURABH

SUMIT SAURABH (Querist)
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09 August 2014 please tell me about holding and subsidiary term and condition and its reporting as per law

Nikhil Kaushik

Nikhil Kaushik (Expert)
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09 August 2014 please refer section 2(87) of Companies Act 2013.

“subsidiary company” or “subsidiary”, in relation to any other company

(that is to say the holding company), means a company in which the holding company—

(i) controls the composition of the Board of Directors; or

(ii) exercises or controls more than one-half of the total share capital

either at its own or together with one or more of its subsidiary companies:

Provided that such class or classes of holding companies as may be prescribed

shall not have layers of subsidiaries beyond such numbers as may be prescribed.

Explanation.—For the purposes of this clause,—

(a) a company shall be deemed to be a subsidiary company of the holding

company even if the control referred to in sub-clause (i) or sub-clause (ii) is of

another subsidiary company of the holding company;

(b) the composition of a company’s Board of Directors shall be deemed to

be controlled by another company if that other company by exercise of some

power exercisable by it at its discretion can appoint or remove all or a majority of

the directors;

(c) the expression “company” includes any body corporate;

(d) “layer” in relation to a holding company means its subsidiary or

subsidiaries;

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