SHARE CAPITAL HELD BY SUBSIDIARY COMPANY: UNDERSTANDING THE CONCEPT
Share capital refers to the amount of money raised by a company through the issuance of shares.
A subsidiary company is a company that is controlled by another company, known as the parent company.
When a subsidiary company holds shares in the parent company, it is known as share capital held by subsidiary company.
The implications of share capital held by subsidiary company can be both positive and negative for the parent company.
On the positive side, it can provide the parent company with a source of funding and increase its liquidity.
On the negative side, it can lead to a loss of control over the parent company and create conflicts of interest.
It is important for companies to carefully consider the implications of share capital held by subsidiary company and take appropriate measures to manage any risks.