I have a small query on treatment of Beta Company in the Books of Alpha Company.(Refer Description)
Alpha Company Shareholding as follows
James 16.67%
Mathew 16.67%
George 16.67%
Donald 16.67%
Blair 16.67%
Azeem 16.67%
Beta Company Shareholding structure as follows:
James 19.42%
Mathew 13.15%
George 10.02%
Donald 6.89%
Blair 2.19%
Alpha Company 30.16%
Henry 9.09%
Mark 9.09%
As you can see from above, although Alpha shall only have 30% of ownership in Beta Company, but all the individual partners in Alpha Company shall also have individual ownership in Beta Company, except Mr. Azeem.
So regardless of the fact that ownership is less than 50%, wouldn’t it conclude that even Alpha Company has only 30% of shareholding in Beta Company, but the Board of Partners in Alpha Company would still have significant control and influence on the decisions of Beta Company?
In this case will Beta Company will be classified as a subsidiary of Alpha Company? If yes, what will be the percentage of consolidation of Beta Company results into Alpha Company?
Alpha Company Shareholding as follows
James 16.67%
Mathew 16.67%
George 16.67%
Donald 16.67%
Blair 16.67%
Azeem 16.67%
Beta Company Shareholding structure as follows:
James 19.42%
Mathew 13.15%
George 10.02%
Donald 6.89%
Blair 2.19%
Alpha Company 30.16%
Henry 9.09%
Mark 9.09%
As you can see from above, although Alpha shall only have 30% of ownership in Beta Company, but all the individual partners in Alpha Company shall also have individual ownership in Beta Company, except Mr. Azeem.
So regardless of the fact that ownership is less than 50%, wouldn’t it conclude that even Alpha Company has only 30% of shareholding in Beta Company, but the Board of Partners in Alpha Company would still have significant control and influence on the decisions of Beta Company?
In this case will Beta Company will be classified as a subsidiary of Alpha Company? If yes, what will be the percentage of consolidation of Beta Company results into Alpha Company?