Interesting article by Dr. chandatre in Chartered Secretary on definition of subsidiary company

[CS Jigar Shah]

The Companies Act: New definition of ‘subsidiary company’

By Dr. K. R. Chandratre

 

The main problem with the new definition of the term ‘subsidiary company’ is section 2(87)(ii) of the Companies Act, 2013 according to which if one company exercises or controls more than one half of the total share capital either on its own or together with one or more of its subsidiary companies, the other company will be treated as the former’s subsidiary. The total omission of the provisions of section 4(7) of the Act of 1956 appears to be a shortcoming of the new Act.

 

 

Regards,

CS Jigar Shah

98333 77647

 

Source: Chartered Secretary, September edition.