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, 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.
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.