AIBE XV — January 2021 — Q.97 (Companies Act, 2013)

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Q.97

Company Law Medium Knowledge-Based

Bare Act Companies Act, 2013 · Section 2(6)

An associate company, in relation to another company, means:

A a company in which that other company has a significant influence, but which is a subsidiary company of the company having such influence and includes a joint venture company

✓ a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company Answer

C a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and does not include a joint venture company

D a company in which that other company has full shares, and is a subsidiary company of the company having such influence and includes a joint venture company

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Explanation & Strategy

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Under Section 2(6) of the Companies Act, 2013, an 'associate company' means a company in which another company has significant influence (but not a subsidiary). Significant influence means control of at least 20% of total voting power or business decisions.

At a Glance

Subject Company Law

Difficulty Medium

Act Companies Act, 2013

Section Section 2(6)

Answer (B) Knowledge-Based

Paper AIBE XV — January 2021

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