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Liabilities of Susidiary Company

Karishma Sharma (12 Points)

18 January 2019

Can benefit of loss from subsidiary company be taken by holding company. ?

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5 Replies

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 18 January 2019

No, because subsidiary company is completely different entity.

Santhosh Ganesh (AGM - Secretarial ) (136 Points)
Replied 18 January 2019

No as per IT Act it is not possible

however while preparing the Consolidated financials of the Wholly owned Subsidiary the loses can be absorbed by the holding company and in case of merger of the the WoS and holding Company the losses can be absorbed.

Jatin Bajaj (CS) (2928 Points)
Replied 19 January 2019

No it is not practically possible.

only at the time of merger of two companies, it is possible that the loss of the subsidiary Company is carry forwarded by the subsidiary Company.

Subramanian (nil) (33 Points)
Replied 21 January 2019

Sir / Madam, I am working in a listed public limited company. It has two layers of unlisted public companies as subsidiaries. (One subsidiary is wholly owned by listed parent company and other is owned by the unlisted subsidiary company). The (Second layer) subsidiary company needs to be striked off from the records of the registrar by filling form stk-2. My doubt here is weather i need to get approval from holding companies shareholders for striking off this second layer subsidiary ??

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 22 January 2019

There is no difference in procedure of closure of subsidiary or holding company, so yes consent of shareholders of holding company is also must since subsidiary is a part of holding although being subsidiary of subsidiary.