Capital gain
This query is : Resolved
20 October 2013
what is the difference between holding company and subsidiary company??
explain with examples
20 October 2013
Sec 4 of the Companies Act, 1956
defines holding and subsidiary company.
With reference to this, holding company
is the one which acquires controlling
interest in another company by - (1)
acquiring more than 50% of equity
capital, (2) having such powers which
enables it to appoint or remove majority
directors on other company's board, or
(3) acquiring holding company of
another company through one of the two
modes above.
Hence holding company is the
controlling company whereas subsidiary
company is the controlled company. But
legally both are seperate entities and in
practical may just operate seperately
even in different lines of business.
defines holding and subsidiary company.
With reference to this, holding company
is the one which acquires controlling
interest in another company by - (1)
acquiring more than 50% of equity
capital, (2) having such powers which
enables it to appoint or remove majority
directors on other company's board, or
(3) acquiring holding company of
another company through one of the two
modes above.
Hence holding company is the
controlling company whereas subsidiary
company is the controlled company. But
legally both are seperate entities and in
practical may just operate seperately
even in different lines of business.
20 October 2013
Sanket has given you the definition, lets take an example: Reliance Industries Limited
It owns more than 50% of companies such as:
Reliance Industrial Investments and Holdings Limited
Reliance Ventures Limited
Reliance Strategic Investments Limited
Reliance Industries (Middle East) DMCC
Reliance Retail Limited
So these companies are the subsidiaries and Reliance Industries Limited is the holding company.
To understand these concepts better, you should read annual reports of big companies such as ITC, reliance etc.
http://www.ril.com/rportal1/DownloadLibUploads/1368015904301_AR08052013.pdf
It owns more than 50% of companies such as:
Reliance Industrial Investments and Holdings Limited
Reliance Ventures Limited
Reliance Strategic Investments Limited
Reliance Industries (Middle East) DMCC
Reliance Retail Limited
So these companies are the subsidiaries and Reliance Industries Limited is the holding company.
To understand these concepts better, you should read annual reports of big companies such as ITC, reliance etc.
http://www.ril.com/rportal1/DownloadLibUploads/1368015904301_AR08052013.pdf
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- GST on export of services and Input Credit
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- ITC temporary reversal and reclaim
- TDS U/S. 194NF
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- Applicable TDS rate for sale of property in Nov 2024
- GST ON EXPORT COMMISSION
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
Trending Online Classes
CAclubindia
