A UK company owns all the voting shares in a company incorporated in India. How should the Indian entity be classified?
Question and options
A UK company owns all the voting shares in a company incorporated in India. How should the Indian entity be classified?
An Indian company that is a wholly owned subsidiary of the UK company
A foreign company within section 2(42) of the Companies Act, 2013
An Indian company that cannot be a subsidiary because its parent is incorporated overseas
A branch office of the UK company with no separate legal personality
Answer and explanation
A company incorporated in India is an Indian company with its own legal personality, and section 2(87) of the Companies Act, 2013 makes it a subsidiary of a holding company that controls more than half of its total voting power; under section 2(46) a holding company includes a body corporate such as a foreign company. It is not a foreign company under section 2(42), which covers only entities incorporated outside India.
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