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Major Amendment- Companies Amendment Act, 2017

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Companies Amendment Act, 2017 1.     “ASSOCIATE COMPANY” [Section 2(6)] {Not Notified} in relation to another company, means a company in which that other company has a significant influence , but which is not a subsidiary company of the company having such influence and includes a joint venture company. Explanation . — For the purposes of this clause, “significant influence” means control of at least twenty per cent of total share capital , or of business decisions under an agreement; Issue in Definition Total share capital comprises the aggregate of paid up equity share capital and convertible preference share capital . Hence a company may be treated as associate company merely bases on ownership of Optionally convertible redeemable preference shares. Amended Provision Significant Influence’ under the definition of Associate Company: Significant influence to mean control of at least 20%