What is the status of captive power plant SPV in the books of investor / Consumer

Co Act 2013 384 views 1 replies
Company A has invested in Captive power plant i.e. company B , and invested upto 49% of share capital in Co. B , however company does not have any rights to appoint /choose directors and KMP , Company also does not have any operational rights . after completion of lockin period company is entitled to get back the investement value at face value in such case will Company B is considered as Associate company of Company A as per Companies Act
 
 

 

Replies (1)

To determine if Company B is an associate company of Company A, let's analyze the situation based on the Companies Act, 2013.

 Definition of Associate Company As per Section 2(6) of the Companies Act, 2013, an "associate company" means a company in which another company has a significant influence, but which is not a subsidiary company of the company having such influence.

Significant Influence Significant influence is the power to participate in the financial and operating policy decisions of the investee company, but it's not control or joint control over those policies.

Analysis In your scenario: -

Company A has invested up to 49% of the share capital in Company B. - Company A doesn't have any rights to appoint or choose directors and KMP. -

Company A doesn't have any operational rights. - Company A is entitled to get back the investment value at face value after the lock-in period.

Conclusion Based on the given information, it seems unlikely that Company B would be considered an associate company of Company A.

Here's why: - Company A lacks significant influence over Company B's financial and operating policies, as it doesn't have the power to appoint directors or participate in operational decisions. - 

The entitlement to get back the investment value at face value after the lock-in period might suggest a more investor-like relationship rather than a significant influence. 

However, a detailed analysis of the agreement and the specific circumstances would be necessary to make a definitive determination. 


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 19 March 2026
Article Assistant

Gupta Sachdeva & Co. Chartered Accountants

New Delhi

CA Final

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured 14 March 2026
Associate CA

N N V Satish&co

Hyderabad

CA

View Details
Company
Featured 14 March 2026
Article Trainee

N N V Satish&co

Hyderabad

CA Inter

View Details
Company
Featured 12 March 2026
Customer Relationship Executive

TAXLET

Calicut

B.Com

View Details
Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details
Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details