0
What else can I help you with?
What is the difference between a limited company and public limited company?
PLC's share holdings are usually sold to the public, ie the public part own them. Limited companies, the shares stay in the company with the directors holding them, they cannot sell them to the public.
How do you create a sister company?
A sister company generally means a company that has the same corporate parent as another. For example, if Corporation A and Corporation B are both subsidiaries of Corporation XYZ, Corporation A and Corporation B are sister companies. I have occasionally seen two companies which are owned by the same individual referred to as sister companies since they have the same ownership (just like in the parent-sub example) but that usage is less common. In that case, there is no "parent" company. If you have only one company and want a sister company in the classic sense, you need to first set up a holding company to own the shares of the first company and then set up a new subsidiary under the holding company.
What do you understand by holding company?
A holding company is a type of business entity that primarily exists to own shares of other companies, allowing it to control and manage those businesses without directly engaging in their operations. It does not produce goods or services itself but instead invests in and oversees its subsidiaries, which can be in various industries. This structure can provide benefits such as risk management, tax advantages, and simplified ownership of multiple businesses. Holding companies are often used to facilitate mergers, acquisitions, and overall corporate strategy.
Can a company buy other company's shares?
yes, many times as part of a "hostile takeover". ------- often a subsidiary company will be partially owned by the parent, the parent may retain 51 percent of the stock to retain control. In other cases a company may spin off a division that doesn't fit their plans and make it a stand alone company and own a minority stake. Sometimes a hostile takeover will be attempted by purchasing and/or controlling a large percentage of shares and affecting who is on the board of directors and other company policies.
Can minor hold a shares in company?
Yes, a minor can hold shares in a company, but typically through a custodial account or in the name of a parent or guardian until they reach the legal age of majority. The specific regulations regarding minors holding shares can vary by jurisdiction, so it's essential to consult local laws. Additionally, while minors can own shares, they may face limitations on their ability to vote or make decisions regarding those shares until they become adults.
Can a subsidiary own its parent company?
A subsidiary co. can be a member of its holding company if it holds shares of parent co. as a trustee or in form of a deceased shareholder.
What is the difference between a subsidiary company n a holding company?
A subsidiary is an 'off-shoot' or 'child' of an existing company, either partly or fully owned by the 'mother' company doing mostly similar or complementary businesses, e.g., a travel services subsidiary of a big bank (the bank's executives travel so much it makes sense to have a self-owned company serve its needs). A holding company holds the shares of stock, or shares of ownership of other companies, usually but not always controlling shares (enough shares to exert control of the companies). If you own shares of stocks in a holding company, you are essentially owning a part of many different companies and are trusting the holding company's management to handle the proportions for you. A subsidiary is the down result of a business idea. A holding company is the up result of a business idea.
What is a parent company?
A corporation is owned by its shareholders. A number of people (shareholders) can invest their money into a corporation and own shares in that company. In a parent company, a company such as the one above starts up another corporation (subsidiary corporation), and the original (parent) company itself owns the shares of the subsidiary. The individual shareholders of the parent own the subsidiary, but indirectly. They are not, themselves, shareholders in the subsidiay -- the parent owns the shares. One of the reasons for this is to "limit" the liability of shareholders. If the parent owns several subsidiares, and one of them gets into financial difficulty, it can be closed down (or sold) without upsetting the operations of the other subsidiaries. Selling one operation as a subsidiary is also easier because it is financially "self-contained." Similarly, if a person or a group of people owns several corporations, they can form a "holding" company, and transfer their shares of each companyinto it, rather than holding them personally. The individuals then become shareholders in the holding (parent) company, and the parent company owns the shares in each of the original companies, which then are subsidiaries of the parent. Indiviuals own shares in parent.> Parent owns shares in each subsidiary.
How are holding companies beneficial?
A holding company owns outstanding shares of other companies. This allows capital to be invested on a large scale, and the holding company can benefit by earning tax-free dividends on their shares if they own more than 80 percent of the company's stock.
What is consolidated operating income?
Where any company holds more then 50% shares in any other company then that company holding more then 50% shares is called "PARENT COMPANY" while the company whose shares are hold by the parent company is called "Subsidiary company"So where there is a parent and subsidiary relationship is exists then it is the requirement of parent company to show the interest in subsidiary company as well as results of it's own operations in one single statement or document which is called "Consolidated Financial Statement" and Consolidated income statement is prepared to show the consolidated income of parent as well as subsidiary company together to show the combine interest of parent in all subsidiaries as well.Example:Company A holds 100% shares of company B and company B has operating income of $ 1000 and company A has income of $10000.SoConsolidated Operating income = $11000If company A holds 60% interest thenConsolidated operating income = 10000 + 600 = $10600$ 600 is the 60% share of income of Company B.
Can a company invest in its own subsidiary?
Not only does a company invest in its own subsidiary, it typically owns all of the stock of its "wholly owned" subsidiaries.
What is the capital maintenance concept for?
Protect the issued capital of the company for the benefit of creditors Coy is separate legal entity - capital belongs to coy (not to the members) A company cannot expend its funds buying back its own shares; a company can not own shares in itself directly or indirectly through an intermediary such as a subsidiary … these principles have been substantially amended by statute.
What is a preparation of consolidated balance sheet?
Where any company acquire morethen 50 % shares in any other company then that company becomes the parent and other becomes subsidiary and it is legal requirement that parent company should prepare the consolidated financial statements for it;s own and all subsidiary companies as a one single document to show the complete picture of company workings
What are the advantages and disadvantages to becoming a subsidiary as opposed to starting your own company?
One of the advantages if being subsidiary is that you dont incur the start up costs which include the licences which can be very expensive.Secondly it becomes easier to operate as a subsisdiay because the holding company a name already in the market this therefore means that the subsidiary will not not incur marketing costs.
Can a subsidiary raise funds for parent by an Initial public offering?
Yes, a subsidiary can raise funds for its parent company through an Initial Public Offering (IPO), but this typically occurs when the subsidiary goes public and sells shares to investors. The funds raised from the IPO can be used by the subsidiary for its own operations, growth, or to pay dividends to the parent company. However, the specific structure and agreements would determine how the funds are allocated and whether they directly benefit the parent company.
Can you explain how shares work in a private company?
In a private company, shares represent ownership in the company. When you own shares in a private company, you have a stake in the business and may receive dividends or have voting rights. The number of shares you own determines your ownership percentage in the company.
Wholly owned indirect subsidiary?
Since the Internet had no information on this, I asked a lawyer, who by his own admittance said he wasn't positive, but believed that: a wholly owned indirect subsidiary is a wholly owned subsidiary (Company 3) that itself is owned by a wholly owned subsidiary (Company 2) of another company (Company 1). Such that Company 3 is a "wholly owned indirect subsidiary" of Company 1.
