Advantages and disadvantages for subsidiary company

[Ankita Dhabhai]

Hi,

Can anybody let me know the advantages and disadvantages for a subsidiary company.

If one of our listed companies purchase 51 % equity shares of the private company then what compliances should be followed and what would be its pros and cons?

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ANKITA DHABHAI (Company Secretary)  Mobile     +91-9167375508 Email       ank...@dhabhai.company  cs.an...@gmail.com

[swastika mishra]

Respected madam ,

     There is so many pro and cons of subsidiary companies 

such as your company needs to prepare a consolidated financial statement along with a standalone financial statement..

As you said your company is a listed company, if that subsidiary is a material  subsidiary then many provisions of SEBI(LODR) are also applicable like regulation 24A.

In your case the sub. company is a private company so it will become deemed a public company.

pro are 

reduce tax liabilities 

reduce risk

many provisions of the Companies Act 2013, gives advantage to the company 

like a company can give loan to its subsidiaries

subsidiary of  subsidiary  become your company's subsidiary without purchase of shares.    

Thank you with regards

Swastika.

   

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