Hi Experts,
I have been wondering whether a company become associate company if it has common directors or common shareholders (irrespective of amount of shareholding in both entities).
Because as per Section 2(6) of the Companies Act, 2013, ‘associate company’, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company.
(a) the expression “significant influence” means control of at least twenty per cent. of total voting power, or control of or participation in business decisions under an agreement;
And as per section 2(27), “control” shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner.
By referring both can we deduce that a company having common executive directors as associate companies?
CAclubindia
