Question

Are Alpha Corp and Omega Corp a parent-sub controlled group if Alpha owns 79% of Omega’s voting shares? Why or why not?

Are Alpha Corp and Omega Corp a parent-sub controlled group if Alpha owns 85% of Omega’s voting stock? Why or why not?

Are Alpha Corp, Omega Corp and Zeta Corp a parent-sub controlled group if Alpha owns 100% of Omega’s voting shares and Omega owns 85% of Zeta’s voting stock. Why or why not?

Answer 1

Provision:

A parent and sub controlled group relation exist only when one company having owned atlesat 80% of the other company's Voting shares or atleast 80% of value of classes of other company's Stock(Applicalicable to points 1&2Questions)

1.Alpha and omega are not considered as parent sub controlled group because it doesnot owned atleast 80% it owns only 79%

2. Alpha and omega are considered to be in parent-subcontrolled group interest beacause it is owning 85% of omega voting stock which satiesfies the one of the conditions for above provision.

Provision:

Parent-sub controlled group relation exist between 3 or more companies exist only when One company directly holds atlest 80% of voting of another company and other company(owned by first Compny) in which that company holds atleast 80% in other company's Voting stock(it means Indirectly owned by the first company and first company also called as commom parent)

3. Alpha,Omega,Zeta are Parent -subcontrolled groups because Alpha [Common parent For Zeta(indirectly)&Omega(Directly)]ownes more than 80% of voting stock in omega which inturn such company owns more than 80% of voting stock in Zeta.it means Zeta is indirectly become sub group interest to alpha