Business Studies

A company is a government company and X Company is a subsidiary of A company then X Company will be a _____________.


Answer & Solution

Government company


SOLUTION

A “subsidiary company” or “subsidiary” of a Government Company would also be categorized as a Government Company provided the Government Company
(i) controls the composition of the Board of Directors; or
(ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its other subsidiary companies.

Even if the control referred above is of another subsidiary company of the Government company, the company would still be categorized as a “subsidiary” and hence a government company. Thus, joint-venture companies formed by various Government companies or public sector undertakings are also considered as government companies.

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Single Correct Medium Published on 18th 08, 2020
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