Janki Prasad 4 All Answer Holding, subsidiary relationship: For the purpose of determining whether a company is subsidiary of another company, only equity shares issued by the first mentioned company are to be taken into account [Section 4 1 b iiof Companies Act, ].
The date of issue of certificate is immaterial.
Most important thing is, that such acts cannot be ratified even by the whole body of the shareholders of the company. Thus, when the corporate veil is lifted by the courts, i. Fees for registration of a company depending upon the authorised capital must also be paid.
See that one of the promoters is kept as the subscriber to the memorandum and articles of association of the proposed company.
In the given case, A will not succeed and the company is empowered to appoint B as a solicitor of the company and may change the articles accordingly.
Any of the circumstances illustrated below must exist to constitute the relationship of holding and subsidiary companies: a When one company controls the composition of Board of Directors of the other companies.