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Nidhi (Querist)
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27 December 2010 Dear All

If a principal company makes an investment in the Subsidiary Company for acquiring its capital. Will it be required to maintain Register of Investments. If Yes then can anybody provide me with the Format please.

Thanks & Regards

Nidhi Maheshwari

udit sharma

udit sharma (Expert)
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27 December 2010 Hi..

Exemption under section 372A(8) of the Companies Act, 1956 shall be available only in case of loan made, guarantee given/security provided/ acquisition by way of purchase, subscription or otherwise made by the Holding Company to its Wholly Owned Subsidiary only.

Since in the above case, the investment is proposed to be made by a Holding Company in its Subsidiary Company (As it is not a wholly owned subsidiary) for acquiring its share capital, provisions of Section 372A will have to be complied with and an entry to that effect will have to be made in the Register of Investments u/s 372A(5) of the Companies Act, 1956

In case the investment is made by a Holding Company in its Wholly Owned Susidiary, then this will be exempt u/s 372A(8) and no need to make this entry in the Register of Investments maintained u/s.372A(5).

However, the Company has to mandatorily maintain a Register of Investments u/s. 372A(5) of the Companies Act, 1956.

God Bless

Udit Sharma

Jayashree S Iyer

Jayashree S Iyer (Expert)
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27 December 2010 Yes. The Company is required to maintain a Register of Investments u/s.372A(5) of the Companies Act, 1956 in which the details of investment in Share Capital have to be made.

Nidhi

Nidhi (Querist)
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27 December 2010 No, but the company is the wholly owned subsidiary company only incorporated in Ukraine where as Principal Company is in India and is a Private Limited Company.
So, I am not clear enough with the point that whether i should maintain the register or not?

Please let me know one more.

Thanks & Regards

Nidhi Maheshwari