Can a Subsidiary acquire shares in a Parent Company?
Can a Subsidiary own shares in a Parent Company?
When a company is controlled and managed by another company, the company that is being managed is termed as subsidiary while the controlling company can either be a parent company or holding company. If a parent company or holding company is the owner of 100% stocks of its subsidiary, then the subsidiary is known as a Wholly Owned Subsidiary.
A subsidiary is allowed to have 100% Foreign Direct Investment (FDI) in many of the sectors through Company type business entity without taking any prior Government approval.
What is the difference between a holding company and subsidiary?
To influence or control the board of directors.
Subsidiaries are controlled either partly or wholly by another company which can be a parent company or a holding company. According to sec 2(88)(i) a company in which the holding company controls the formation of the Board of Directors is called subsidiary.
Can a subsidiary hold shares in a holding company?
A holding Company can hold shares of the subsidiary, but a subsidiary can’t hold shares in its holding company. This restriction applies even if shares are held by a nominee of the subsidiary Company and not by the subsidiary company itself.
When a subsidiary is a legal representative of a deceased member of the Holding Company.
When a subsidiary is appointed as the trustee for its parent or holding company.