TOPIC 21: QUICK REFERENCE TO “Associate Company”

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Quick Reference to "Associate Company" :-.
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Legal Provision:-.
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Section 2(6) of Companies Act, 2013.
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MCA Circular :- 25th June, 2015
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Companies (Specification of definitions details) Rules, 2014
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Points:-.
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1. The Associate Company means a Company in which other Company has Significant influence.
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2. Significant influence means to hold minimum 20% of total share capital or business decisions under an agreement.
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3. It does not include Subsidiary Company. But it includes joint venture Company.
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4. The shares held by a company in another company in a 'fiduciary capacity' shall not be counted for the purpose of determining the relationship of 'associate company' under section 2(6) of the Companies Act, 2013 ( MCA Circular:- 25th June, 2015).
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5. Here the Term total share capital means :-
# paid equity share capital plus Convertible preference shares. (Rule 2(1)(r) of Companies (Specification of definitions details) Rules, 2014).
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Regards
ACA SOURAV BAGARIA