Answer Posted / phanindra

A COMPANY WHICH CONTROLS ANOTHER COMPANY IS CALLED 'HOLDING
COMPANY' AND THE COMPANY SO CONTROLLED IS
CALLED 'SUBSIDIARY COMPANY'
SECTION 4 OF COMPANIES ACT 1956 STATES THAT A HOLDING
COMPANY IS IF IT
1.CONTROLS THE COMPOSITION OF BOARD OF DIRECTORS OF ANOTHER
COMPANY
OR
2.HOLDS MORE THAN HALF OF THE NOMINAL VALUE OF EQUITY SHARE
CAPITAL OF ANOTHER COMPANY.

A SUBSIDIARY COMPANY CANNOT HOLD SHARES OR BE A MEMBER OF
HOLDING COMPANY

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