TaxTMI 
TaxTMI 
Can a Holding Company issue preference share to a subsidiary company.
Is there any limit for issuing the preference share Capital.
John Shannel
Issuance of Preference Shares
10 Mar 2011 
1 Reply 
1301 Views Asked by
Preference shares can be issued by a holding company to its subsidiary, subject to preferential allotment rules and statutory compliance.
A holding company may issue preference shares to its subsidiary; there is no prohibition under the Companies Act, 1956. Such issuances must comply with the Preferential Allotment (Unlisted Public Companies) Rules and applicable statutory provisions governing further issue of capital and inter-corporate loans and investments, including Section 81(1A) and Section 372A, and other relevant Companies Act provisions. (AI Summary)
A holding company may issue preference shares to its subsidiary; there is no prohibition under the Companies Act, 1956. Such issuances must comply with the Preferential Allotment (Unlisted Public Companies) Rules and applicable statutory provisions governing further issue of capital and inter-corporate loans and investments, including Section 81(1A) and Section 372A, and other relevant Companies Act provisions. (AI Summary)