XI-9

 

 

WISH YOUR COMPANY TO BE A MEMBER OF ITS HOLDING COMPANY

 

 

  1. Please note that a subsidiary company is prohibited from becoming a member of its own holding company.

 

  1. Please also note that if by inadvertence, the subsidiary company has been allotted shares b its holding company, such allotment will be totally void.

 

  1. If you want to make our subsidiary company a member or shareholder of its holding company, then do the following;--

 

i)                Make our subsidiary company to hold shares in its holding company in trust for any other member or members vide topic 198;

 

ii)              See that the holding company or any other subsidiary of it does not have beneficial interest in the shares held in trust by our subsidiary company, except by way of security for the purpose of a transaction entered into in the ordinary course of a business.

 

  1. Instead of adopting the procedure in item 3 above, you can also;--

 

i)                Hold the shares of a particular company in the name of our own company which is not et a subsidiary of that other company and become its member;

 

ii)              After becoming a member of that company, make our company a subsidiary of that other company by applying the provisions of section 4;

 

iii)            Do not exercise voting power in the meeting of the holdings company.

 

5.     in order to enjoy both the membership and the voting rights in our holding company, you can do the following.

 

i)                Hold the shares of an other company (to become holding company afterwards) not in the name of our own company but as a trustee of some other persons;

 

ii)              See that the other company whose shares are held by company in trust or an other subsidiary of that company does not have beneficial interest under the trust.

 

iii)            After becoming a member of that company, make your company a subsidiary of that other company (now becoming the holding company) by applying the provisions of section 4.

 

6. If your subsidiary company is, or becomes a legal representative of any deceased member of our holding company, then your company can become member of our holding company and can also enjoy voting rights.