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subsidary company

raj singh (author) (72 Points)

21 December 2009

what is the meaning of subsidary company ?

1 does if x pvt tld own more than 50% of shares of y pvt ltd company ,does the y pvt ltd company atomatic become subsidary of x company

2. how many maximum % shares pvt ltd company can own by law of its subsidary company

3. how many maximum subsidary companies can form 1 pvt ltd company

4.does all the properties own by subsidaries company can be calculated as property of main company as basically all the shares owned by main company or in the existance of each company property belong to each company is property each company differentently even all shared own by main company.

please clear how company law applies in this case

thanks

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Anshika ( CA -Industry- Sr.Accounts Officier) (141 Points)
Replied 21 December 2009

As per Companies act -a company , be deemed to be a subsidiary of another if,
(a) that other controls the composition of its Board of directors; or
b)
(i) 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.

Illustration
Company B is a subsidiary of Company A, and Company C is a subsidiary of Company B. Company C is a subsidiary of Company A, by virtue of clause (c) above. If Company D is a subsidiary of Company C, Company D will be a subsidiary of Company B and consequently also of Company A, by virtue of clause (c) above; and so on.