Holding Company

INTRODUCTION One of the popular firms of business combination is by path of memory association or Parent Company. A property companion is one which directly or indirectly acquires any wholly or more than one- half(a) the way out of justness shares in one or more companies so as to secure a controlling interest in such companies, which are then known as subordinate companies. safekeeping companies are able to nominate the majority of the directors of supplementary follow and therefore control such companies. keeping ac guild envision directly from such adjuvant partnership or it may acquired majority OR shares in subsisting company. Such company also considered as subsidiary company in which property company acquired majority shares. MEANING UNDER COMPANIES ACT 1956 farewell 4 of the companies Act, 1956 defines a subsidiary company. A company is a subsidiary of a nonher if and only if a) That other company controls the piece of music of its Board of Di rectors; or b) That other i) Where the first mentioned company is an actual company in respect of which the holders of Preference shares issued before the start of this Act have the same voting rights in in all respect as the holders of Equity shares 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 token(a) grade of its Equity share capitals. OR iii) The company is a subsidiary of any company which is that other companys subsidiary. ADVANTAGES OF keeping COMPANIES Following are the advantages of prop Comp any: 1) subordinate article company main! tained their separate identity. 2) The public may non be aware the existence of combination among the various company. 3) Holding company need not to be invest remedy amount in the share capital in subsidiary company still enjoy controlling power in such company. 4) It would be possible to carry forward losings for income tax purposes. 5) Each subsidiary company prepares...If you want to plump for a full essay, order it on our website: BestEssayCheap.com

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