HOLDING & SUBSIDIARY CO.

Pvt ltd 1280 views 2 replies

Vivek Kumar Tibrewal

Service

41 Points Joined March 2009

Pl help:

Company "A Ltd." is holding 50% of paid up share capital of "B Pvt. Ltd". Mr. X is Common Director in Both the Compnaies and Holding 10 % shares in 'A Ltd.' and 1 % shares in 'B Pvt. Ltd. Is 'B Pvt. Ltd. is Subsidiary Co of "A Ltd."

Regards

Vivek Kr. Tibrewal

Kolkata

Replies (2)

Ajay Mishra

Company Secretary

74352 Points Joined March 2009

Dear Mr. Vivek

Section 4 of the Companies Act, 1956 dealing with meaning of holding company and subsidiary company. Section 4(b)(ii) says where the first mentioned company (A Ltd.) hold more than 50% of its equity share capital of other company (B Ltd) then company B ltd. will be treated as subsidiary of A. Ltd.

In your case company hold only 50% of the share capital of company B Ltd., so it will not be treated as subsidiary company.

Regards

Guest

In this case the Shareholding clause is not applicable. But We have to check the no. of directors in each company, as the directors relationship is also one of the important factor for considering the Holding and Subsidiary Company relation.

If you need further clarification than contact me.

Ankur Shah (Practicing Company Secretary)

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