Explanation:

As per the provisions of Companies Act, 2013 Subsidiary company by itself or through its nominee cannot hold any shares into its holding company except in special cases. Holding Companies are barred by Companies Act, 2013 from allotting or transferring its shares to a subsidiary company. However, a subsidiary company can hold shares in holding company in the following cases:

a. Subsidiary company can hold shares as legal representative of deceased member of holding company.

b. Subsidiary company can hold shares of holding company as trustee

c. Subsidiary company has become shareholder before it become a subsidiary company of holding company.