Definition Of Subsidiary

August 1st, 2007 Comments off
Share |

Definition Of Subsidiary

Companies Act defines a subsidiary company as one:

(a) in which the investor company

(i) controls the composition of the board of directors of the investee company;

(ii) controls more than one half of the voting power of the investee company; or

(iii) holds more than one half of the issued shared capital ( excluding preference shares); or

(b) which is a subsidiary of a subsidiary of the investor company.


The investor company is the holding company of the investee company if the investee company is its subsidiary. For example H holds more than 50% of the equity shares of S1,S2,S3. Therefore H, S1, S2 and S3 form a group, with H being the holding company and the other companies being subsidiaries of H.

Comments are closed now.

Financial Accounting


Advertise Here | Brain Teasers/Puzzles | Greeting Cards | Inspirational Quotes | Jokes/Humor | Useful Links | Motivational Stories | Resource | Shopping | Share/Express Your Views | Testimonials | Universities/Colleges | Words of Wisdom from Religions | FREE POSTING OF ACCOUNTING & FINANCE JOBS VACANCY|