Holding subsidiary relation on basis of same direcctors.

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kaushik sreekumar (Querist)

21 November 2014 One of the reason for Holding Subsidiary relation between two companies is by controlling the composition of Board of Directors. My Question is whether this condition is present in the case presented below :
ABC Pvt Ltd is a company established in 2000 of which 40 % shares are held by Ram & 60 % by Mohan. Now in the year 2013 they incorporate a new company XYZ Ltd of which 40 % shares are held by Ram , 40 % by Mohan & 20 % by Shyam. Can a holding subsidiary relation happen between the two companies based on this ?

Amol S Joglekar

Amol S Joglekar (Expert)

21 November 2014 Of course YES.It is very much present in the case cited above.

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kaushik sreekumar

kaushik sreekumar (Querist)

22 November 2014 But Sir in the case the "Company" ABC Ltd is not having any control on the composition of board of directors of XYZ Ltd.It is just that its Directors are having majority ownership right.So can we mix ownership power of directors as the controlling power of the company (which is having separate legal existence from its members) ?.
Correct if i am wrong in the view provided above.

Amol S Joglekar

Amol S Joglekar (Expert)

22 November 2014 What you are saying is correct so far as day to day functioning is concerned. But the ultimate equation is in favour of these 2 who have the right to control. Your views please.

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