Companies Act General ClausesMCQQuestion 5732 of 6

As per the Companies Act, 2013, which of the following is considered as an 'associated company' of a company?

Options

AA company in which the first company has a significant influence but not a controlling stake

BA company in which the first company has a controlling stake

CA company which is a holding company of the first company

DA company which is a subsidiary company of the first company

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Correct Answer

✅ Option A — A company in which the first company has a significant influence but not a controlling stake

All Options:

AA company in which the first company has a significant influence but not a controlling stake ✓
BA company in which the first company has a controlling stake
CA company which is a holding company of the first company
DA company which is a subsidiary company of the first company

Detailed Solution & Explanation

For determining associated companies, we need to look at Section 2(6) of the Companies Act, 2013. This section states that a company shall be deemed to be an associate company of another if at least two of the directors of the latter are at any time within the financial year, the directors of the former company.

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