Holding company and Subsidiary

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Ankur (Querist)
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05 November 2007 I want to ask what is the difference between holding and subsidiary company and what is the procedures to form such companies

KAAPIL

KAAPIL (Expert)
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05 November 2007 Holding Company and Subsidiary Company are explained in AS 21 and Companies Act Sec. 212.
Holding Company is holding company of the other if:
(a) Holds more than half the nominal value of shares
(b) Controls composition of majority of the directors of the other
(c) Voting of 20%

e.g. If reliance can appoint in X Limited 7 out of 12 directors

OR

e.g. Holds 51% shares

OR

Reliance owns voting power in X Limited 24%.

Ravikumar.G

Ravikumar.G (Expert)
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06 November 2007 Mr.Ankur please read out sec 4 of the companies act, 1956. There are lot of details are there with example. And also deemed public company concept will arise.