Can the subsidiary company hold shares in its holding company?
Can the subsidiary company hold shares in its holding company?
Jeeba Jul. 12, 2018
No, but having some exceptions.
Section 19 of the companies act, no subsidiary company can hold
shares in its holding company.
However, there are certain circumstances where the holding of shares by the subsidiary company are permissible.
i) If the subsidiary company holds such shares as the legal representative of a deceased member of the holding company
ii) The subsidiary company holds such shares as a trustee;
ii) where the subsidiary company is a shareholder of the company even before it became a subsidiary company of the holding company.
