1. The structure for investment and return of investment including losses should be chalked out by mutual talks in a meeting between both the companies.
There is no legal format for a mutually agreed situation and terms and conditions.
2.If the team X is not under control of the company A legally, then team X should be treated as a private entity and their services are to be leased or hired on the agreed terms between the team and the company A.
A decision is to be taken in this regard as per articles of association in a board of directors meeting involving all major shareholders in the meeting.
No individual decision can be held as legally valid decision.
3.My company's business agreement or joint venture is between the both the companies. i.e., My company and company A.
Now both the companies have to resort to their own terms and conditions after having resolved the same their respective board of directors meeting after which a joint resolution may also be passed about the modalities for joint venture. Both the companies are separate entities but are willing to do this business jointly, so a separate agreement in this regard may be the guidelines for all the transactions and the business to be carried out jointly.
4.This can be drawn as a pre-condition that either of the company should not start their own business on the same line till this agreement between both the companies are in force.
5. A Provision to this effect may be made in the articles of association or memorandum of association with terms and conditions governing all the issues involved in it.
6. Yes, they both are standing on different platform.
B.1 As per companies act, 2013 section 2(31) Deposit includes any receipt of money by way of deposit or loan or in any other form by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India.
A. Procedures to be followed for taking Loan from Members (Company):
As per Chapter V, Rule 2(1) (c) (VI), any amount received by a Company from any other company is excluded from the definition of deposits. Therefore, loans taken by a Company from any other Company, even if such other Company is its member, will not be treated as deposits. Hence the provisions and procedures required to be followed for accepting deposits in Chapter V under the Companies Act, 2013 will not be applicable in such cases.
B. Procedures to be followed for taking Loan from Members (Company):
As per Chapter V, Rule 2(1) (c) ( VII ), any amount received by a Company from a person who, at the time of the receipt of the amount, was not a Director of the Company but was member of the Company will not be considered as deposit, Because Private Companies are allowed to accept Deposits from the members upto 100% of Paid up Share Capital and Free Reserves.
C. Procedures to be followed for taking Loan from Members (Other than Company & Directors):
Private Company can accept deposits from the Members.
*Private Company can accept deposits from Members without complying with the Provision of Section 73(2) clause (a-e) following private Companies:
1) Which accept from its members monies not exceeding 100% percent of aggregate of the paid up share capital, free reserves and Securities Premium account; OR
2) Which is a start-up, for five years from the date of its incorporation; OR
3) which fulfill all of the following conditions, namely:-
a. Which is not an associate or a subsidiary of any other Company;
b. If the borrowing of such a company from the banks or financial institutions or anybody corporate is less than twice of its paid up share capital or fifty crore rupees, whichever is lower; and
c. Such a company has not defaulted in the repayment of such borrowings subsisting at the time of accepting deposits under the section.
Provided that all the Companies accepting deposits shall file the details of monies so accepted to the Registrar of Companies in Form DPT-3.
3. As per Section 2(46) “holding company”, in relation to one or more other companies, means a company of which such companies are subsidiary companies
As per Section 2(87) “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company—
If a Company is a Subsidiary of another Company. Following are the implication:-
Many relaxations to private Company are not available to subsidiary of public Company.
Subsidiary of Public Company is Public Company.
Subsidiary can’t given loans for purchase of shares of holding Company
Company can’t buy its shares through subsidiary.
A holding Company can and does hold shares of subsidiary, but a subsidiary can’t hold shares in its holding company. Share allotment made to subsidiary is void.
This restriction applies even if shares are held by nominee of subsidiary Company and not by the subsidiary company itself.
The minutes of the Board meetings of the subsidiary company shall be placed for review of the Board meeting of the holding Company.
The Board report of the holding Company should state that they have reviewed the affairs of the subsidiary company also.
The definition of Subsidiary Company mentions ‘total share capital’. Hence, preference capital can’t be ignored. Thus, even if a company has less than 50% equity shares in another company, the other Company can be its holding company, if including preference share capital, the total holding is more than 50%.
