Sunday, February 21

What is an Associate Company under Companies Act 2013?

Under Companies Act 2013, an Associate Company, in relation to another company, means a company in which that other company has a significant influence.

- “Significant Influence” means control of at least 20%. of total share capital, or of business decisions under an agreement;
 - Associate Company is NOT a Subsidiary Company
 - It includes a Joint Venture Company irrespective of the shareholding

Further, Control includes:
 - right to appoint majority of the directors or
 - to control the management or
 - policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders’ agreements or voting agreements or in any other manner.

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