Lecture 05

On the basis of the control
1. Holding Company: A parent company that owns and controls the management and composition of the Board of Directors of another company (i.e. subsidiary company) is termed as a holding company.
2. Subsidiary Company: A company whose more than 51% of its total share capital is owned by another company, i.e. a holding company either itself or together with its subsidiaries, as well as the holding company also governs the composition of Board of Directors is called the subsidiary company.
3. Associate Company: A company in which another company possesses a considerable influence over the company, then the latter is called as an associate company. The term considerable influence implies controls a minimum 20% of total share capital, or business decisions, as per an agreement.