Wholly Owned Subsidiary Company

The second member will hold shares as a nominee of the sole beneficiary namely the holding company.

Originally posted by :Dave
"	To form a company, it requires a minimum of 2 members to subscribe to the shares of that company. My understanding is that, to incorporate a  WHOLLY OWNED SUSIDIARY COMPANY, the same principle outlined above holds good. It is interesting to note that, for a company to call itself a wholly owned subsidiary of a parent/ holding company, the entire share capital is to be held by the latter ( Holding/ parent co), which is contrary to the above principle. To put it simple, How does a  wholly owned subsidiary company (1 member/company holding 100% capital) comes into existence while the Company Law requires a minimum of 2 members to set up a company. Please deliberate on this!	"

I am agree with s. srin. because to form a company atleast 2 members in case of private ltd. company and incase of public ltd. at 7 member. but in Income tax in chapter of capital gain it is clearly mention that the shares should be hold by holding or its nominees. but as per my opinion this should be like entire shares should be hold by holding company and/or it nominees.

Hi every body

Please some one clarify me regarding the matter or question and procedure for following queries.

1. A limited company have a wholly owned subsidiary company which is also a limited company.

2. Now the shares (i.e. 100%) of wholly owned subsidiary company transfer to by their Directors to another company.

3. whether is it possible to transfer only on Board meeting itself.

4. whether it is falling under section 293 of companies act 1956.

5. if yes what is the procedure whether EGM, by Special or Ordinary resolution.

6.whether transfer the shares only one company which mens violating the requirment of minimum seven members in case of limited company.

Please clarify. i am in a confusing position.

thank yoy in advance