Question

ABC Limited has allotted equity shares with voting rights to XYZ
Limited worth * 15 Crores and issued Non-Convertible Debentures
worth 40 Crores during the Financial Year 2019-20. After that total
Paid-up Equity Share Capital of the company is 100 Crores and
Non-Convertible Debentures Stands at 120 Crores,
Define the Meaning of Associate Company and comment on whether
ABC Limited and XYZ Limited would be called Associate Company
as per the provisions of the Companies Act, 2013?​

Answer 1

Answer:

Associate company in relation to another company means a company in which that other company has a significant influence but which is not a subsidiary company of the company having such significant influence and includes a joint venture company.

Explanation:

So in the case of abc limited and xyz limited we cannot called them an associate company because The Ministry of Corporate Affairs has clarified that the shares held by a company in another company not become an associate company in a fiduciary capacity