(87) Subsidiary Company or Subsidiary

Regulation 2

(1)

(zm)

of LODR

“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 total voting power either at its own or together with one or more of its subsidiary companies:

Proviso

Provided that such class or classes of holding companies as as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed . (Effective from 20-09-2017)

Explanation

For the purposes of this clause,—

(a)

a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause ( i ) or sub-clause ( ii ) is of another subsidiary company of the holding company;

(b)

the composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors;

(c)

the expression “company” includes any body corporate;

(d)

“layer” in relation to a holding company means its subsidiary or subsidiaries (Effective from 01-04-2014)

Notes, amendments & references (3)

Substituted vide Companies (Amendment) Act, 2017 dated 03.01.2018, effective from 07.05.2018. To view commencement notification, Click Here

To view the notification of Companies Amendment Act,2017 Click Here

Refer rule 2 Companies (Restriction on number of layers) Rules, 2017. To view the rule, Click Here