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Published by Ravi Gupta
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Published by: Ravi Gupta on May 21, 2014
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05/21/2014

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Here’s Quick Way to classify a company on the

basis of ownership
On the basis of ownership or control, companies may be classified
into three categories, i.e. (1) Holding company, (2) Subsidiary
company, and (3) Government company.
(1) Holding Company:
A holding company is a company which holds majority of shares of
another company. Such company exercises control over the
composition of Board of Directors of the other company and is in a
position to influence the formulation of policy.
(2) Subsidiary Company:
A company is known as a subsidiary company when (a) the
composition of its Board of Directors is controlled by another
company; or (b) the other company holds majority of its equity
shares; or (c) the other company controls more than half of its
voting rights; or (d) it is a subsidiary of another subsidiary company.



(3) Government Company:
A Government company means any company in which not less than
51 per cent of the paid-up share capital is held by the Central
Government, or by any State Government or Governments, or partly
by Central Government and partly by one or more State
Governments and includes a company which is subsidiary of the
Government company. Some of the examples of Government
companies in India are : Coal Mines Authority Ltd., Steel Authority
of India Limited and National Aluminum Company Ltd. etc.
Entrepreneur has no scope for this type of company.

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