HOLDING AND SUBSIDARY COMPANY
This query is : Resolved
23 April 2010
HI ALL,,,
CAN A HOLDING COMPANY SELLS ITS STOCK TO ITS 100% SUBSIDARY COMPANY.
WHAT PRECAUTIONS ARE REQUIRED TO BE TAKEN BY BOTH THE COMPANIES.
PLEASE REPLY
THANKS ALLL
CAN A HOLDING COMPANY SELLS ITS STOCK TO ITS 100% SUBSIDARY COMPANY.
WHAT PRECAUTIONS ARE REQUIRED TO BE TAKEN BY BOTH THE COMPANIES.
PLEASE REPLY
THANKS ALLL
25 April 2010
A subsidiary company cannot hold voting rights in the holding company. If the stock is convertible into shares, then shares cannot be issued by holding company to subsidiary company. Please refer Sec. 42 of the Companies Act.
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