Definition of Holding Company
" Any company who controls other company is called holding company. "
In other words, if any company has any one power from following three powers, then that company will be holding company :-
If any company has 51 % shares of other company, then this company becomes holding company of other.
Or
If any company has power to appoint board of directors of other company, then this company becomes holding company of other company.
Or
Main holding company also will the holding company of all subsidiaries’ subsidiary companies.
Explanation with Example
Suppose, H is holding company of S because 51 % shares are of H in S. S is also of holding Company of R because S have power to appoint the board of directors of R Company and then H is also holding Company of R.
Main features of Holding Company
1. Holding Company provides the power to work independently to subsidiary company. Because relationship of holding and subsidiary company is not amalgamation or merge but both company joins for cutting the cost of competition and getting the benefits of monopoly.
2. Holding company can also deal with subsidiary company and it is also recorded in both books .
3. Under Company act of India 1956 , it is required to attach the copy of final accounts of subsidiary company with the annual report of holding company .
" Any company who controls other company is called holding company. "
In other words, if any company has any one power from following three powers, then that company will be holding company :-
If any company has 51 % shares of other company, then this company becomes holding company of other.
Or
If any company has power to appoint board of directors of other company, then this company becomes holding company of other company.
Or
Main holding company also will the holding company of all subsidiaries’ subsidiary companies.
Explanation with Example
Suppose, H is holding company of S because 51 % shares are of H in S. S is also of holding Company of R because S have power to appoint the board of directors of R Company and then H is also holding Company of R.
Main features of Holding Company
1. Holding Company provides the power to work independently to subsidiary company. Because relationship of holding and subsidiary company is not amalgamation or merge but both company joins for cutting the cost of competition and getting the benefits of monopoly.
2. Holding company can also deal with subsidiary company and it is also recorded in both books .
3. Under Company act of India 1956 , it is required to attach the copy of final accounts of subsidiary company with the annual report of holding company .
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