Explain the classification of the companies on the basis of control as per the Companies Act, 2013.

In line with the Companies Act, 2013, following are the classification of the Companies on the basis of control:\na) Holding and subsidiary companies: ‘Holding and subsidiary’ companies are relative terms. A company is a holding company in relation to one or more other companies, means a company of which such companies are subsidiary companies. [Section 2(46)]. For the purposes of this clause, the expression “company" includes any body corporate.\nWhereas section 2(87) defines “subsidiary company” in relation to any other company (that is to say the holding company), means a company in which the holding company—\ni) controls the composition of the Board of Directors; or\nii) exercises or controls more than one-half of the total voting power either at its own or together with one or more of its subsidiary companies: Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.\nb) Associate company [Section 2(6)]: In relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company.\nExplanation. — For the purpose of this clause —\n(i) the expression “significant influence” means control of at least twenty per cent of total voting power, or control of or participation in business decisions under an agreement;\n(ii) the expression “joint venture’’ means a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.