A company has two subsidiaries in one it holds 100% share capital and in other around 70% shares are in the holding company's name and rest 30 % in the Director's name, which are common in all the three companies.Now for the finalisation of accounts consolidated Financial statements will be made of all the three companies but will the transactions/loans etc held between the holding company and its 2nd subsidiary which is not a 100% subsidiary will attract section 185 and 188 as at the date of balance sheet i.e. 31st march'2015.all the three companies are in the real estate development business and therefore use to do business collectively means to say one has the land the other develops it and the third may done the construction part. can we treat their work division as done in the ordinary course of business at arm's length or a resolution is required to be passed. The capital of all the three is below 10 crs.

Section 188- Related party transactions.

Posted By: Anita 9 year(s) ago