: (1) The parent company may control its subsidiary company as follows :-(a) By having direct or indirect control over the formation of the Board of Directors,
(b) By acquiring the majority shares of the company.
(2) If any one company is a subsidiary of another subsidiary company, the first company shall also be a subsidiary company of the main company controlling the latter company.
(3) Even if the shares of the company are accepted by a representative on behalf of the main company or its subsidiary company or a person nominated on behalf of the main company or its subsidiary company has the right to appoint the director of such company, the conditions written in sub-section (1) shall be deemed fulfilled. But shares held in the following cases while determining the main company and subsidiary company shall not be recognized for this purpose:-
(1) If a company has taken a debenture or is entitled to exercise any right based on the deed of trust issuing the debenture or has received shares,
(2) If the lending company has accepted shares as security.