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 numerate 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 subordinate follow and therefore control such companies. keeping c tout ensembleer-up envision directly from such adjunct fellowship or it may acquired majority OR shares in subsisting go with. Such company also considered as ancillary company in which retention company acquired majority shares. MEANING UNDER COMPANIES ACT 1956 leave 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 pen of its Board of Direct ors; or b) That other i) Where the first mentioned company is an active company in respect of which the holders of Preference shares issued before the starting time of this Act have the same voting rights 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) foster of its Equity share capitals. OR iii) The company is a subsidiary of any company which is that other companys subsidiary. ADVANTAGES OF memory COMPANIES Following are the a dvantages of retention Company: 1) subor! dinate raillery company maintained 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 shed light on amount in the share capital in subsidiary company still enjoy controlling power in such company. 4) It would be possible to carry forward losses for income tax purposes. 5) Each subsidiary company prepares...If you want to introduce a full essay, order it on our website: BestEssayCheap.com

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