What is a holding company in relation to its subsidiary?
Correct answer: A. A company that controls another company
- A. A company that controls another company
- B. A company that has no shareholders of its own
- C. A company formed only to audit another company
- D. A company that must always be owned by its subsidiary
Explanation
A holding company controls another company, commonly through control of voting power or the composition of its board. A subsidiary remains a separate legal entity despite that control.
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About Company Law Basics
Company law covers incorporation, separate legal personality, limited liability, shares, the memorandum and articles of association, and the powers and duties of directors. It also includes shareholder meetings, resolutions, company records, audit, winding up and the differences between a registered company, partnership and sole proprietorship.
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