Which of the following statements is correct?
A)a parent entity can hold only direct ownership interests in a subsidiary
B)a parent entity can hold only indirect ownership interests in a subsidiary
C)a parent entity cannot control a subsidiary if its shareholding is less than 50%
D)a parent entity can hold both direct and indirect ownership interests in a subsidiary

Question

Quizplus · Accepted Answer

A parent entity can hold both direct and indirect ownership interests in a subsidiary. Direct ownership occurs when the parent entity holds shares directly in the subsidiary. Indirect ownership occurs when the parent entity holds shares in a company that, in turn, holds shares in the subsidiary. The amount of shareholding required for a parent entity to control a subsidiary can vary based on the specific circumstances and legal requirements in different jurisdictions.

Which of the Following Statements Is Correct