CAF-4 · Chapter 16 · Question 10 of 10
Alpha Limited holds 51% of the voting shares in Beta Limited. Beta Limited holds 60% of the voting shares in Gamma Limited. What is the legal relationship between Alpha Limited and Gamma Limited?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Gamma Limited is deemed to be a subsidiary of Alpha Limited.
Explanation
A company is deemed to be a subsidiary of another if the holding company controls it either directly or through one or more of its subsidiaries. Since Alpha controls Beta, and Beta controls Gamma, Gamma is a subsidiary of Alpha.
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