Subsidery Company

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This query is : Resolved

Deepak Maheshwari (Querist)

27 March 2009 Hi All,

Just want to clear my doubts from all of you regarding subsidary company.

1. Can main company adjust their profit with subsidery.

2. If main company gives their building to subsidery for running of business so can main company charge rent from them.

Regards

Deepak

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)

27 March 2009
Holding company and subsidiary company are two different entities under law.

They cannot adjust the profits as per their whims and fancies.

Rent can be charged by the holding company to subsidiary company at market rate or reasonable rent.

Deepak Maheshwari

Deepak Maheshwari (Querist)

27 March 2009 Thanks, My points is

Charging of rent is compulsory or choice of parent company.

another thing is that is it possible in any case to adjust subsidiary lossess with parent company i.e by making 100% holding subsidiary or any other way

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)

27 March 2009 Charging of rent is compulsiory.

You cannot adjust subsidiary loss in holding company books.

However in consoldiated balance sheet it will refelct automatically.

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