Shreya Shah (Company Secretary) 23 June 2008

Subsidiary company

Dear All,

As per the provisions of Section 4 of the Companies Act, 1956, one of the conditions of deemed subsidiary company is that

(a) that the other controls the composition of its Board of Directors

We are planning to convert the main company from private company to public limited company. There are around 6 group companies in all. In all the group companies, we have common directors. Also, the Directors hold majority of shares in all the said group companies.

So as per the abovementioned provisions, do all our group companies be deemed subsidiaries of the main company???

Regards

Shreya

Reply Follow

4 Replies

Manish Singh (Advocate) 23 June 2008

yes it is a csae of susidiary company

Shreya Shah (Company Secretary) 24 June 2008

Dear Sir,

Thanks for the reply. I am still confused about this. I feel that this is a case of companies under the common management and not that of subsidiary company.Correct me if I am wrong.

Regards

Shreya

Guest (n/a) 25 June 2008

Dear Shreya,

Common directors doesn't mean subsidiary relation. One company either holds more than 50% S Cap or one co. has right to appoint/remove the director of other. then first co. becomes holding 2nd subsi.

Common dirctor means co under same mgmt/ group.

hope will benefit you.

Thanks