1. What is difference between Subsidiary company & Associate company (associate concern) ?
2.How sister company differs from subsidiary company & associate company ?
3. Which section/act defines siste concern & associate concern?
pls guide
2 Replies
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 10 November 2011
A company is siad to be subsidary when it is controlled by parent i.e when it holds 51% of subsidarys capital (both equity and preference put to getther).A concern will be an associate when it holds significant influence ie.20% and more than 20%.Significant influence means power to control the operating and Financial policies
I dont Know what is sister concern I think Companies within the group is termed as such.
About Associates You can Refer AS-23 and AS-18
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 11 November 2011
A sister concern means an concern which comes under the same management but there is no control amongst the companies in one another. For instance Tata motors & Tata Steel are sister concerns as they are under the same maangement but do not have any stake/control between them.
What Sivaram has said about subsidiary & associate companies I agree with him.
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