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query regarding legal status

Nitin Singhal (Gaining knowledge...) (320 Points)

17 January 2010

1)Can entities other than companies have holding or subsidiary? If Yes, then plz give example.

2) Under which Act Mutual funds in India are formed? Do they have separate legal entity? for eg. does SBI mutual fund has separate legal entity from SBI.

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Nitin Singhal (Gaining knowledge...) (320 Points)
Replied 20 January 2010

is there nobody who can answer these questions.

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kushal ( ) (88 Points)
Replied 20 January 2010

Well I need bit of time to go through certain things. I ll definitely try my level best to answer your query.

As far as holding and subsidiary is concerned in LLP there might be such relationship but I am still not clear about this. Companies Act defines holding and subsidiary relationship based on management control (that is why in sec 4 of companies act controlling composition of board, holding nominal capital etc “control” related parameters are used). Though I have gone through LLP act 2008 there is no holding subsidiary relationship is defined.

Nitin Singhal (Gaining knowledge...) (320 Points)
Replied 21 January 2010

Thank You Kushal at least for your support that you will try.

kushal ( ) (88 Points)
Replied 24 January 2010

How is a mutual fund set up?

A mutual fund is set up in the form of a trust, which has sponsor, trustees, asset Management Company (AMC) and custodian. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. The trustees of the mutual fund hold its property for the benefit of the unit holders. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. Custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI Regulations by the mutual fund.

SEBI Regulations require that at least two thirds of the directors of trustee company or board of trustees must be independent i.e. they should not be associated with the sponsors. Also, 50% of the directors of AMC must be independent. All mutual funds are required to be registered with SEBI before they launch any scheme.

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