Wholly Owned Subsidiary

[CS Shainshad Aduvanni]

Dear All,

Please tell me under which sub-section of Section 4 of the Companies Act, 1956. we can mention a WOS.


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Shainshad Aduvanni
Company Secretary
Coimbatore

09841414439
0422-2434491/92/93

[SUDHIER KUMAR POLA]

Assuming "X" ltd is holding 100 % capital of "Y" ltd, there by 'Y" ltd is a WOS of "X"Ltd, then the applicable sub section  is Sec.4(1)(b)(ii) of Companies Act,1956.

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[ramela rangasamy]

Under Companies Act, Section 2(47) defines subsidiary Company.

Section 4 (1) of Companies Act, defined the situation, when a company will become subsidiary and holding.. Section 4(1)(b)(i) states that when more than 50% of TVP of a company (Let it be "A") is held by another company (Let it be "B"), then that company (B) will be treated as Holding Company.

But wholly subsidiary not defined. So we have to take a stand that when 50% and more is held by another, holding company relationship is determined. When entire shares of a company (Let it be "A")is totally owned by another company.  We will call the Company ("A") as WOS.

Members views are also solicited.

R.Ramela

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From: CS Shainshad Aduvanni <csupt...@gmail.com>
To: allc...@googlegroups.com; csch...@googlegroups.com; 7thmsoppa...@googlegroups.com; css...@googlegroups.com; emerging-compa...@googlegroups.com; kerala-compan...@googlegroups.com; csmy...@googlegroups.com
Sent: Thursday, 16 February 2012 4:27 PM
Subject: [CSMysore] Wholly Owned Subsidiary

[ramela rangasamy]

Please correct the section as Section 4(1)(b)(ii) in place of Section 4(1)(b)(i). Sorry for the inconvenience caused.

R.Ramela

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From: ramela rangasamy <rum...@yahoo.com>
To: "csmy...@googlegroups.com" <csmy...@googlegroups.com>
Sent: Thursday, 16 February 2012 6:15 PM
Subject: Re: [CSMysore] Wholly Owned Subsidiary

[balaram desina]

Dear Members,

 

While defining the "wholly owned subsidiary company", Section 12 of the CA, 1956 also to be kept in mind.

 

In IJM(India) Infrastructure Limited, it was held that at leat one share has to be maintained by the other 6 or 1 members in case of Public and Private Companies respectively, then remaining shares has to be maintained by the Holding Company.

 

Then only it is treated as Wholly owned subsidiary company.

 

 

Regards,

 

CS. D. Balaram

Thanks & Regards

CS.D.Balaramakrishna

MBA,LLB,MA(HR),ACS
Asst. Company Secretary

Shalivahana Group

91-9959850156, 9393856235

 

 

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[ramela rangasamy]

In that case, only other 6 hold shares on behalf of the one holding company, we will call it as WOS.

If the 6 hold shares in their individual capacity, it can not be called as WOS.

R.Ramela

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From: balaram desina <balara...@gmail.com>
To: csmy...@googlegroups.com
Sent: Thursday, 16 February 2012 6:34 PM

[Bidu Bhusan Dash]

Dear Ramela,

Iam not clear what you reproduced above, that other 6 means ?

Please clarify ?

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Regards,
Bidu

[ramela rangasamy]

Dear Bidu Bhusan,

You have mentioned that in case of Public Company, atleast 7 subcribers are required. If the said company is promoted by another company (i.e Holding company), Out of 7 subscribers, one will be the company and other 6 may be individual or other.

If all the 6 owns shares in their name, then we cannot call that public company incorporated as WOS of the Holding Company.

If all the 6 owns shares on behalf of the Holding Company on compliance of Section 187C, then we can call that public company incorporated as WOS of the Holding Company.

R.Ramela

9442617180

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From: Bidu Bhusan Dash <bidub...@gmail.com>
To: csmy...@googlegroups.com
Sent: Friday, 17 February 2012 11:07 AM

[SUDHIER KUMAR POLA]

O

If the percentage reaches to 100,  then the relationship is WOS and Holding

[SUDHIER KUMAR POLA]

Kindly ignore my earlier mail!!

If one company holds 100% percent PUC of another company then it is said to be a WOS of another.( No section ).

Statutory Requirements to establish the relation:--

1) Minimum number of shareholders as per sec.12 of Companies Act,1956.

2) Compliance of Sec.187C of the Companies Act,195.


As per sec.12 there must be minimum number of share holders not essentially all must carry voting rights.

In view of the above on  following the procedure prescribed U/s.187C, all the rights (beneficial ownership) gets transferred to the transferre and there by it is called as WOS!!!!!

[ramela rangasamy]

Yes. Correct.

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From: SUDHIER KUMAR POLA <sudhirk...@gmail.com>
To: csmy...@googlegroups.com
Sent: Friday, 17 February 2012 2:00 PM

[ramela rangasamy]

Yes. Correct.

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From: SUDHIER KUMAR POLA <sudhirk...@gmail.com>

To: csmy...@googlegroups.com
Sent: Friday, 17 February 2012 2:08 PM

[Rama Murthy]

The six persons need to hold the shares on behalf of the holding company for which an applicable form needs to be filed with ROC disclosing the facts

Ram

[SUDHIER KUMAR POLA]

Its an intimation to the ROC about the change in voting rights as the
shareholder has transferred his beneficial rights to another
shareholder.No prior consent from ROC needs to be obtained.

[CS Shainshad Aduvanni]

Dear Professionals,

Thanks for extensive clarifications.

Now in my case the WOS is at USA. The rule of that country does not prescribe any minimum subscribers.

So the Holding Company holds 100% of share capital.

Whether anything wrong in this.

Thanks & Regards

[ramela rangasamy]

Dear Mr.Shainshad Aduvanni,

In your case, hope holding company is in India and its WOS is in UAE.

Therefore no problem.

Our discussion is related to subsidiary in India, holding company is in foreign. How to determine the status of the subsidiary in India as Private or Public as per Section 4(7)?

R.Ramela

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From: CS Shainshad Aduvanni <csupt...@gmail.com>

To: csmy...@googlegroups.com; csch...@googlegroups.com; 7thmsoppa...@googlegroups.com; allc...@googlegroups.com; kerala-compan...@googlegroups.com; css...@googlegroups.com; emerging-compa...@googlegroups.com
Sent: Saturday, 18 February 2012 9:53 AM

[Rama Murthy]

There is a prescribed form for this purpose. I am unable to recollect it. If you can mention, it will help every one

thanks

Ram

[ramela rangasamy]

In case of change in beneficial interest, please refer to The Companies (Declaration of Beneficial Interest in Shares) Rules, 1975 - Form no.I, II and III and now by electronic mode Form 22B.

R.Ramela

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From: Rama Murthy <ramgu...@gmail.com>
To: csmy...@googlegroups.com
Sent: Saturday, 18 February 2012 1:40 PM