Holding company subsidary company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2012 company X want to make company Y as its subsidary company by issuing its shares to company Y instead of paying cash to the company Y for the purchase of its share ?

can this be possible under which section?
notify me i will be waiting for ur reply......

Ajay Mishra

Ajay Mishra (Expert)
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10 May 2012 Hi

Yes, it is possible, read section 4, 292 and section 81 of the companies Act, 1956.

Section 4 deal with definition of holding and subsidiary company.

Section 292 deal with Board Power on investment in other company.

Section 81 deal with issue of Fresh shares.

Section 75 deal with return of allotment filed with ROC after allotment of shares.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

11 May 2012 thank you sir for ur reply
can it be possible for a pvt ltd company having a sister concern to form a holding company in which it can transfer the shares of both companys and make the new comapny a holding one ..
and pay the subsidary companies instead ofb cash its share and the purpose of the company is to hold the shares of first mentioned company and its sister concern .so as in the future any new investment is der in the first mentioned company then there will be no change in mangement power.
waiting for ur reply and plz notify the sec.

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