Companies Act- Subsidiary/ Holding

[CA Rachit Agarwal]

As per Section 4 of the Companies Act, 1956 if the company holds more than 50% of the equity shares then such company would be holding company.

Whether Joint Venture company floated by different entities, and one venture partner holds more than 50%, then venture partner holding more than 50%, can it be termed as holding company.

[Surender Gupta]

What is the status of that Joint partner? Is it a company for the purpose of companies act, 1956 or is it a different person other than company?. Only a company under companies act, 1956 can be a holding company. Also be notes that company includes body corporate.

AI Summary

Holding company status depends on whether the majority equity holder is a company; non-company holders cannot be holding companies.
Whether a joint venture becomes a holding company under Section 4 depends on whether the majority equity holder is a company; only a company (including a body corporate) can be a holding company even where it holds more than fifty percent of the equity.