Legal Question in Business Law in India

A PUBLIC LIMITED COMPANY ABC acquires 51% controlling stake in a Profit-making Private Limited Company XYZ; and appoints one of its Directors as a Director in that Company. In the Annual Balance Sheet of Company ABC, the results of XYZ are also clubbed......the XYZ comes to be known as ABC Group Company.

This implies that the company XYZ enjoys the rapport and goodwill of being a part of the bigger ABC Group Company.

In case, in future, the Company XYZ fails in discharging its business commitments, particularly the CREDITORS' payments running into crores of rupees, then, CAN an aggrieved creditor raise the issue of dues with the Promoter (CONTROLLING Company) ?. What will be the legal status of the Controlling Company and its liabilities???

Can the aggreived Creditor file a WINDING UP Petition against the Controlling Company???


Asked on 2/10/12, 10:45 pm

2 Answers from Attorneys
www.lawconcern.com S.Seshadri www.lawconcern.com

Usually a subsidiary company creditor cannot file winding up of parent company for non- payment of dues by subsidiary. However, these questions cannot be answered in abstract. There may be possible remedies for the creditor under agreement or even statutory rights. [email protected]

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Answered on 2/11/12, 12:19 am
RAJIV GUPTA (Cell: +91 9811284735) [email protected]

it depends upon the terms and conditions under which the controlling company is managing the pvt ltd company. however, without verifying the records and extensive research on this issue, it is not possible to give an opinion. better retain a lawyer for the same.

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Answered on 2/11/12, 1:45 am


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