Status of Demerged Co.

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Shikha (Querist)
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28 June 2008 Co. B is demerged from Co. A. Promoters & Chariman being the same. Share holding of Co. B is
Promoters' share- 68.44%
Co.s A's stake- 13.27%
Associate Co.'s stake- 10.00%
Public 5.61%
Others 2.68%

Will Co. B be termed as a subsidiary/ group co. of Co. A?

Please give the legal view.

Amit Bajaj

Amit Bajaj (Expert)
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01 July 2008 It is only a related party and not a subsidiary as Co A is not holding majority interest in the Co B. If it is controlling the board then may be taken as subsidiary. Check under AS 21 and section 4 of companies act.

Shikha

Shikha (Querist)
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22 July 2008 True.However, plz also note that the promoters of both the Co.s r same. And Main promoter is CMD (heading the board of Directors) in both the companies. So the controlling in that manner is of the same nature.

Considering the same control in both the co.s , shall the Co. B be termed as the part of same group as that of Co. A?

Plz. initiate reply. .

Guest

Guest (Expert)

07 October 2009 Co.B is subsidiary company as the management of both the companies are same.

Read Section 4 of the companies act, 1956

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