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Under Section 2(87), Company A is a 'subsidiary' of Company B if B:
AHas lent money to A
BShares a director with A
CControls the composition of A's Board, or controls more than one-half of A's total voting power
DHolds any shares in A
Answer & Solution
Correct answer: C. Controls the composition of A's Board, or controls more than one-half of A's total voting power
A subsidiary relationship arises where the holding company controls the Board composition or more than half the total voting power of the other company.
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