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Under Section 2(87) of the Companies Act, 2013, a "subsidiary company" in relation to a holding company is a company in which the holding company:
Answer & Solution
Correct answer: B.
1. Section 2(87) defines subsidiary on a disjunctive (OR) test.
2. Either control over the Board's composition OR control over more than one-half of total voting power triggers subsidiary status.
3. Voting power may be exercised directly by the holding company or together with one or more of its subsidiaries.
4. The proviso bars layers of subsidiaries beyond the number prescribed for certain classes of holding companies.
_Source: ICSI CS Executive Paper 2 (Company Law) — Lesson 1: Introduction to Company Law, pp. 2-35._
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