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100% Wholly Owned Subsidiary

Sumit Rai Bindlish (CHARTERED ACCOUNTANT) (41 Points)

06 August 2010

Please resolve it :

A Pvt. Ltd. company has its share capital of Rs. 100000/- subscribed & paid by 2 directors.

Now company wants to issue further capital of Rs. 4900000/- to another Company say B Ltd ( foreign company )

Both directors are also having directorship & shareholding in B Pvt. Ltd. After issuing of further capital to B Ltd.

The Shareholding pattern will be :

B Ltd. 98%

1st Director 1%

2nd Director 1 %
Can A pvt. Ltd. be called as WHOLLY OWNED SUBSIDIARY of B Ltd. Will it make any difference in Answer, if Further Capital will be Rs. 9900000/-

Can these 2 directors be act as nominee shareholders having 1% or 0.5% shareholding.

Please revert back ASAP on issues & procedures related to this.

With Regards

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4 Replies

BHAVESH DOSHI (CS) (42 Points)
Replied 07 August 2010

No A Pvt Ltd can not be held as WOS of B Ltd(in both cases).

by making 2 directors beneficial owner (nominee shareholder) for 10,000 shares (assumed FV & pd up value Rs.10) u need to file e-form 22B under section 187C, company will become WOS of B Ltd

views from members / seniors solicited.

BHAVESH

Jagruti (CS) (Service) (1953 Points)
Replied 07 August 2010

I may not agree.

If Directors held shares in individual capacity then A will not be treated as Wholly owned Subsidiary.

However if they hold shares as a Nominees than yes A will be wholly owened Subsidiary of B.

THere will be no Diff u issue 49 lacs or 99 lacs shares

Neha Rajput (Chartered Accountant ) (58 Points)
Replied 17 February 2017

if there are 2 directors in wholly owned indian subsidiary and Indian Director holds 1 share as Nominee. Is it necessary for foreign Director to also hold 1 share as a nominee director ?

S.Kavitha (Finance Professional and Student of ICSI) (30 Points)
Replied 12 July 2017

Dear Sir / Madam,

Kindly Clarify the following questions

1) If the foreign company wants to start its branch office in India with the authorised capital of Rs.10 Lakhs and there are two directors( Foreigner and Indian). What is the % of share holding pattern the directors can have?.

2) If the foreign company wants to start Wholly Owned Subsidiary in India with the authorised capital of Rs.10 Lakhs and there are two directors( Foreigner and Indian). What is the % of share holding pattern the directors can have?.

3) If the parent company networth is less than $ 100000 in home countery, then what is the procedure to start the WOS and Branch office in India.

Please answer the above question with detailed explanation.

Thanks and Regards,

S.Kavitha.