Investment in holding company.. ?
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 December 2011
Can a 100% wholly owned subsidiary company can invest in its own holding company either in the form of Equity / Preference ?. Or advise me in which form, it can invest in its Holding company ??>??. Answer for this Query is something urgent.. please.
29 December 2011
no subsidiary can not invest in its holding..
29 December 2011
No, can not. Section 42 of companies act specifically states that a body corporate can not become a member of its parent company except in a case where
-subsidiary acting as a representative of a deceased member of the holding company (or)
-acting as a trustee( or)
-it was a member in parent company either at the commencement of companies Act or before becoming a subsidiary of the holding company.
-subsidiary acting as a representative of a deceased member of the holding company (or)
-acting as a trustee( or)
-it was a member in parent company either at the commencement of companies Act or before becoming a subsidiary of the holding company.
29 December 2011
Section 42 of the Companies Act, 1956 prohibits the subsidiary to invest in holding company except in specified circumstances, as Surya explained.
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