Section 187 of CA 2013 : Section 187: Investments Of Company To Be Held In Its Own Name

CA 2013

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Explanation using Example

Imagine a company, XYZ Pvt. Ltd., decides to invest in shares of another company, ABC Corp. According to Section 187(1) of the Companies Act, 2013, XYZ Pvt. Ltd. must make and hold this investment in its own name. However, if ABC Corp. is a subsidiary of XYZ Pvt. Ltd., and holding shares in the name of XYZ Pvt. Ltd. would reduce the member count of ABC Corp. below the statutory limit, XYZ Pvt. Ltd. can appoint nominees to hold these shares.

Additionally, if XYZ Pvt. Ltd. receives dividends or interest on the shares of ABC Corp., it can temporarily deposit these shares with its bank for the pu...

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