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Companies Act 2013 updates

Discussion in 'Accounting, Finance & Taxation' started by Aditi Basu, Dec 28, 2013.  |  Print Topic

  1. Aditi Basu

    Aditi Basu New Member

    Money:
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    Clarification with regard to holding of shares or exercising power in a fiduciary capacity - Holding and Subsidiary relationship under Section 2(87) of the Companies Act, 2013.

    MCA which has received a number of representations consequent upon notifying section 2(87) of the Companies Act, 2013 which defines "subsidiary company" or "subsidiary" as to whether shares held or power exercisable by a company in a 'fiduciary capacity' will be excluded while determining if a particular company is a subsidiary of another company, issued a clarification vide circular no 20/2013 dated 27th December 2013.

    It is clarified that the shares held by a company or power exercisable by it in another company in a 'fiduciary capacity' shall not be counted for the purpose of determining the holding-subsidiary relationship in terms of the provision of section 2 (87) of the Companies Act, 2013. It is to be noted that under of section 4 (3) of the Companies Act, 1956, such shares or powers were excluded from the purview of holding-subsidiary relationship.
     
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