n Without Prejudice - Getting it right second time around : company law

Volume 8, Issue 3
  • ISSN : 1681-178X



The existence of a holding/subsidiary relationship between companies is of vital importance, not only because it gives rise to a number of economic and administrative advantages but it also gives enables the application of various provisions of the Companies Act, 1973, which are aimed at preventing abuse which could arise out of such an arrangement. For example, in terms of s37 of the Act, the details of a loan given by a subsidiary company to its holding company must be disclosed in the financial statements of the subsidiary company so as to protect its minority shareholders.

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