12 May 2011
A company is a person in the eye of law, it can hold share in another company or have control over it and such inter-connection bringing the relationship of Holding Company and Subsidiary Company. The Company havinmg control over the other is called Holding Company and the other one is called Subsidiary of the previous one. Section 4 of the Companies Act 1956: : (1) For the purposes of this Act, a company shall, subject to the provisions of subsection (3), be deemed to be a subsidiary of another if, but only if,-
(a) that other controls the composition of its Board of directors; or
(b) that other- (i) where the first-mentioned company is an existing company in respect of which the holders of preference shares issued before the commencement of this Act have the same voting rights in all respects as the holders of equity shares, exercises or controls more than half of the total voting power of such company;
(ii) where the first-mentioned company is any other company, holds more than half in nominal value of its equity share capital; or]
(c) the first-mentioned company is a subsidiary of any company which is that other's subsidiary.
Section 212 of the Companies Act: As per this sec the Balance Sheet and Profit & Loss Account of the subsidiary has to be attached to the annual report of the holding company. Beside the above, the following companies will be treated as subsidiary and holding company: 1) A body corporate incorporate outside India and according to the law of that country it is a subsidiary or a holding company. 2) A body incorporated outside india that would be a public company if incorporated in India has a private as its subsidiary in India , such private company shall be a subsidiary of a public company if it is not a wholly owned subsidiary of that foreign body.
12 May 2011
dear can you help me out somewhat more regarding there relations means actually i need the all provisions of companies act regarding holding and subsidiary companies
CAclubindia
