why a subsidiary co. can't buy shares of holding co. ?????
1 Replies
CA Sandeep Kumar
(Audit Assistant)
(804 Points)
Replied 25 January 2011
when a subsidiary becomes shareholder of holding company, it will entitle it to vote on resolutions passed and there by it becomes an interested party, it mat favour resolutions concerning subsidiary company, etc..
But a subsidiary can hold shares in holding company if the shares were acquired before holding-subsidiary relationship existed, even in this case, it will not have voting power..
I do not know whether my answer is precise, wait for others to respond, requesting members to correct me if i am wrong.
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