Asked by Lupita Sanchez on Jun 23, 2024
Verified
Cross-shareholdings between subsidiaries are:
A) legal under the Corporations Act.
B) illegal under the Corporations Act.
C) not covered by the Corporations Act.
D) none of the above
Cross-shareholdings
A situation where companies hold shares in other companies as part of their investment portfolio.
Corporations Act
Legislation that governs the operation and regulation of companies within a certain jurisdiction, detailing the legal requirements for company formation, operation, and dissolution.
- Understand the legal context and regulations regarding cross-shareholdings and reciprocal ownership interests as per the Corporations Act.
Verified Answer
KD
Kayla DensonJun 27, 2024
Final Answer :
B
Explanation :
According to the Corporations Act, cross-shareholdings between subsidiaries are considered illegal as it can lead to a concentration of voting power and limit competition.
Learning Objectives
- Understand the legal context and regulations regarding cross-shareholdings and reciprocal ownership interests as per the Corporations Act.