Accounts of
Holding
Companies Part-I
BY: BHOOMIKA GARG
, Introduction
As per Section 2(87) “subsidiary company” or “subsidiary”, in relation to any other
company (that is to say the holding company), means a company in which the holding
company—
(i) controls the composition of the Board of Directors; or
(ii) exercises or controls more than one-half of the total share capital either at its
own or together with one or more of its subsidiary companies:
Provided that such class or classes of holding companies as may be prescribed shall
not have layers of subsidiaries beyond such numbers as may be prescribed. Thus,
a) A subsidiary is an enterprise that is controlled by another company ( known as
parent ).
b) A parent/ holding is an enterprise that has one or more subsidiaries.
c) A group is a parent and all its subsidiaries.
, Wholly owned and Partly
owned Subsidiaries
A Wholly Owned Subsidiary is one in which 100 percent
shares with voting rights are owned by holding company. On
the other hand, in a Partly Owned subsidiary, only the
majority of shares i.e. more than 50% are owned by the
holding company. In a partly owned subsidiary, some of the
shareholders do not sell their shares to the holding company.
Such shareholders are known as “Minority Shareholders”.
Every Company having a subsidiary or subsidiaries
has to submit Consolidated Financial Statement in
addition to its own ‘financial statement’.
Holding
Companies Part-I
BY: BHOOMIKA GARG
, Introduction
As per Section 2(87) “subsidiary company” or “subsidiary”, in relation to any other
company (that is to say the holding company), means a company in which the holding
company—
(i) controls the composition of the Board of Directors; or
(ii) exercises or controls more than one-half of the total share capital either at its
own or together with one or more of its subsidiary companies:
Provided that such class or classes of holding companies as may be prescribed shall
not have layers of subsidiaries beyond such numbers as may be prescribed. Thus,
a) A subsidiary is an enterprise that is controlled by another company ( known as
parent ).
b) A parent/ holding is an enterprise that has one or more subsidiaries.
c) A group is a parent and all its subsidiaries.
, Wholly owned and Partly
owned Subsidiaries
A Wholly Owned Subsidiary is one in which 100 percent
shares with voting rights are owned by holding company. On
the other hand, in a Partly Owned subsidiary, only the
majority of shares i.e. more than 50% are owned by the
holding company. In a partly owned subsidiary, some of the
shareholders do not sell their shares to the holding company.
Such shareholders are known as “Minority Shareholders”.
Every Company having a subsidiary or subsidiaries
has to submit Consolidated Financial Statement in
addition to its own ‘financial statement’.
