Section 186 of CA, 2013

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Sachin Pandey (Querist)

14 March 2017 I have a query in Section 186. I am not clear with the language of the law. What does the law want to convey by using this language - "A company to make Investment through not more than two layers of Investment companies" This line is not clear to me, How can one make Investment in Companies through Investment companies?

Ravi Kiran Vustela

Ravi Kiran Vustela (Expert)

14 March 2017 X ltd is any investment company... it has Y ltd a subsidiary which is also an investment company..... and again Y Ltd is having a subsidiary Zltd which is also an investment company...... here x ltd is having two investment layers one is Y.. and other is Z(through Y as holding)... layer means subsidiary. . if Z ltd is having any investment subsidiary then it is will be a contravention of section 186(1)......... Limit is only on investment companies. . there is NO RESTRICTION on having 2+ layers of manufacturing or trading companies

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Sachin Pandey

Sachin Pandey (Querist)

14 March 2017 So basically this section is applicable to Companies having a principle business of Investment? pls confirm.

Ravi Kiran Vustela

Ravi Kiran Vustela (Expert)

14 March 2017 yes ..,....... right.....

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Sachin Pandey

Sachin Pandey (Querist)

16 March 2017 Thanks a lot

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