Company Registration in Tirupur
What is majority shareholding?
If the holding company holds more than half the total capital comprising of paid up equity capital and convertible preference capital, the relationship of holding company and subsidiary subsists between them. In deciding whether this is so, no regard is to be had of the paid-up value of the shares held by the putative holding company, nor to the fraction of the putative subsidiary's distributed profit which the holding company receives, nor to the voting rights attached to the shares it holds in the subsidiary. Consequently, a holding company may be entitled to less than half of the dividends paid on the subsidiary's equity share capital, or may hold less than half of the voting rights exercisable at a general meeting of the subsidiary, yet be its holding company. Furthermore, shares held in the subsidiary by another subsidiary of the holding company, or by a nominee for the holding company or of that other subsidiary, are treated as though they were held by the holding company itself, but shares in the putative subsidiary held by the holding company or its other subsidiaries, or by its or their nominees, are disregarded if they are held in a fiduciary capacity, or if they are held by virtue of any trust deed for securing such debentures, or as security for a loan made in the ordinary course of the lender s business. Sections 736(1) and 744 of the English Companies Act, 1985 in their original form made a company the holding company of another because of its shareholding in that other only if the holding company and its subsidiaries and nominees for it and them together held more than half of the issued equity share capital of the subsidiary. The new provision substituted by the Companies Act, 1989 makes no distinction between the equity and non-equity share capital which the subsidiary has issued, and it attaches no importance to the nominal or paid up value of the subsidiary's shares, but only to the voting rights attached to them.
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