Sec 42(1) of the companies act,1956

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Querist : Anonymous

Querist : Anonymous (Querist)

14 September 2013 Sec 42(1) prohibits the subsidiary holding shares in holding company.

What is the logic behind this prohibition?

Thanks

Ajay Mishra

Ajay Mishra (Expert)
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14 September 2013 To protect the interest of other shareholders. If the subsidiary hold shares of holding company then of more than 51 %, then what will be the status of holding company. It will be more confusing to the status of the holding and subsidiary status.

To protect the status of holding and subsidiary, the section 42(1) has made provision.

Querist : Anonymous

Querist : Anonymous (Querist)

14 September 2013 okay sir. thank u

Ajay Mishra

Ajay Mishra (Expert)
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14 September 2013 My Pleasure..........

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Sec 42(1) of the companies act,1956

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