Dear All
Please let me know what is the major difference between Parent Company and Holding company please tell me in simple language?
4 Replies
Arvind Sharma
(ACA)
(1432 Points)
Replied 11 June 2011
Both are same dear......
Let see what other said....
rahul
(Chartered Accountant)
(5572 Points)
Replied 11 June 2011
A holding company, by definition as per AS 21, is a parent company.
In the general sense the terms are interchangeable. But technically
A parent company is simply a company, trading or otherwise, that holds the majority of shares (atleast 51%) in another company.
A holding company' is normally used in respect of a company set up for the sole purpose of holding shares in other companies, usually to facilitate formation of groups and reorganisations. ie they tend not to have any business of their own. In short, 'holding company' usually infers a non-active parent
In both the cases, holding interest is material to understand Holding and Parent situation. Usually the interest is @ 51%.
(The term parent is a officially defined term in AS 21 BUT holding is not)
rahul
(Chartered Accountant)
(5572 Points)
Replied 11 June 2011
The term parent is a officially defined term in AS 21 so one should take that meaning only ...
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