Thursday, 7 July 2016

Definition of Sister Concern as per Companies Act

SISTER CONCERN

Though no definition of sister concern given under Companies Act 1956 or Companies Act 2013

And the relation between its all subsidiaries is of sister concern

Each of the sister companies operates separately and may have no connection other than sharing the same parent company. Sister companies can be quite different from each other, producing different products and marketing to different audiences

AS PER COMPANIES ACT 1956 (section 370 (1B))


AS PER COMPANIES ACT 2013


It means two bodies corporates includes the concern incorporated outside India having same management where the control and management are taken by a person or group of persons managing one or more organizations.

 

But does not include –


(i)     A corporation sole

Explanation: Corporation sole means only single unit incorporated office occupied by single natural person. Sister concern which has its separate legal existence apart from the persons forming it. It enjoys a completely different legal status apart from its members. 

                               Corporation
 

Corporation Sole            Corporation Aggregate
(Occupied by Single           (Occupied by Group of                    
   Natural Person)                     Companies)

It means two Body corporates, created by same parent company of other subsidiaries and includes the concern incorporated outside India having same management/ control


But does not include-
(i)                 A co-operative society registered under any law relating to co-operative societies; and
(ii)               Any other body corporate (not being a company as defined in this act),  which Central Government may, by notification, specify in this behalf.

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