What is Group

What is Group?

In business this is normal practice to buy shares of other companies. Therefore when a company buys shares of another company it becomes a group of companies. The company buys the shares knows as parent company and the company which shares are bought is known as subsidiary or associates (as case may be)

Example of Group

ABC Company bought 10,000 shares of XYZ Company. The total issued shares of XYZ Company are 15,000. In this example ABC Company buys 67% shareholding in XYZ, therefore ABC Company is parent company and XYZ is a subsidiary company.

Types of Group

There are primarily two Types of Group

1.      Subsidiary : Parent company buys more than 50% shares

2.      Associates : Parent Company buys 20-50% shares