wholly owned subsidiary

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Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2009 Our is a ABC pvt Ltd. The subsribers are Mr A for 50000 shares of Rs 10 each(nominee of XYZ Pvt Ltd) and Mr B for 50000 shares of Rs 10 each(on behalf of XYZ Pvt Ltd.

But ABC pvt Ltd wants to be wholly owned subsidiary of XYZ pvt Ltd.

Please suggest in whose name the shares should be issued and how it can be a wholly owned subsidiary.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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02 December 2009 The shares should be issued only in the XYZ pvt. Ltd. then only ABC will become 100% subsidiary of xyz.

Querist : Anonymous

Querist : Anonymous (Querist)

02 December 2009 Sir whether the shares should be issued in the name of subscribers or the holding company. please explain.

Rasesh

Rasesh (Expert)
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23 December 2009 Issue 50,000 shares in the name of XYZ and 50,000 in the name of B. File the necessary declarations with the ROC showing that the benefitial interest of these shares rests with XYZ.

ABC now becomes wholly owned subsidiary of XYZ.

Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2010 Sir who will be the members and who shall be the Shareholders in this case.

Rasesh

Rasesh (Expert)
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29 January 2010 The shareholder and member in the register of members of ABC will be XYZ and Mr. B. But the benefitial interest in all the shares lies with XYZ.

So in the investments of XYZ, the entire lot of shares issued by ABC would be reflected.

In Mr. B's balance sheet, nothing will be shown.

Similarly, ABC will show B as shareholder with benefitial interest in favour of XYZ. hence, any dividend or bonus etc will be in the favour of XYZ.

Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2010 So in the Annual return of ABC the Share Holders will be:

a) XYZ
b) Mr. B
(Or the Whole shares should be shown in the name of XYZ in a single Folio No.)

and the Members will be:

a) XYZ ( since share Holder)
b Mr. B ( since Subscriber to MOA and AOA)

Am I Correct.

Also Will Mr A be a member, Because he have also subscribed the MOA & AOA on behalf of XYZ.

Rasesh

Rasesh (Expert)
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29 January 2010 Mr. A is not a member. He is only a nominee.

In the Annual return of ABC, show the following as members:
a) XYZ
b) Mr. B (benetifial interest in favour of XYZ)

Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2010 Thanks a lot sir..
Please also tell me how the Share holder list will be reflected in the Annual return of the Company.

Rasesh

Rasesh (Expert)
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29 January 2010 The shareholders list will have both the names:
a) XYZ
b) Mr. B

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