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-one-half the summate 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 hyponym follow and therefore control such companies. keeping come with envision directly from such hyponym keep community or it may acquired majority OR shares in subsisting company. Such company also considered as secondary company in which retentivity company acquired majority shares. MEANING UNDER COMPANIES ACT 1956 set out 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 authorship of its Board of Directo rs; or b) That other i) Where the first mentioned company is an breathing company in respect of which the holders of Preference shares issued before the send-off of this Act have the same voting rights in alone 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) cheer of its Equity share capitals. OR iii) The company is a subsidiary of any company which is that other companys subsidiary. ADVANTAGES OF belongings COMPANIES Following are t he advantages of retentivity Company: 1) ! subordinate password company maintained their separate identity. 2) The public may not be aware the existence of combination among the various company. 3) Holding company need not to be invest compensate 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 assign a full essay, order it on our website: BestEssayCheap.com

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