Subsidiary and Holding Company(Help Needed)

hey it is not possible.

say first A lyd. buys the 51% share of  B ltd, so B ltd will become Subsidiary of A ltd,

and subsidiary co. can't buy share of its holding co. i.e now B ltd can't buy share of A ltd.

What Jay has commented is partly right. We have to determine the relationship of Holding and subsidiary on the basis of date of acquisition of shares. If A Ltd. acquired shares in B Ltd. first, then A ltd. will be the Holding Co. And B Ltd. will be the subsidiary but after such a relationship is established A ltd. will prevent B ltd. from acquiring shares upto 51% in A ltd.. Though, B Ltd. can acquire shares in A Ltd., since A ltd. is the Holding Co., it will restrict and exercise influence on The Board of Directors of B Ltd. that B Ltd. can never acquire so much shares in A Ltd., in practice. So, with this we will be clear that if B Ltd. acquires also, it will be able to acquire only upto 10% or 20% of the shares of A Ltd.. 

Originally posted by : JAY SHAH
	hey it is not possible. say first A lyd. buys the 51% share of  B ltd, so B ltd will become Subsidiary of A ltd, and subsidiary co. can't buy share of its holding co. i.e now B ltd can't buy share of A ltd.

agree

As per section 372, subsy company cannot make invesments in holding co...but it can hold less than 50 % if the shares were acquired prior to holding-subsy relationship and thus concept of cross holding comes into picture