Issuance of Preference Shares, Income Tax

[JOHN SHANNEL]

Can a Holding Company issue preference share to a subsidiary company.

Is there any limit for issuing the preference share Capital.

John Shannel

Posts / Replies

[CA Rachit Agarwal]

Holding Company can issue Preference Shares to Subsidiary Company. There is no restrictions as per the Companies Act, 1956.

However please also refer "Preferential Allotment (Unlisted Public Companies) Rules".

As regarding the limit please get compliance for the provisions of

Section 81(1A)- Further issue of Capital

Section 372A- Inter-Corporate Loans & Investments and other appliable provisions of the companies act.