Document background
The Holding Company Operating Agreement is a fundamental document used when establishing or restructuring a holding company structure in India. It becomes necessary when multiple shareholders or investors come together to form a holding company that will own and manage subsidiary companies or investments. This agreement is crucial for defining the relationship between shareholders, establishing governance mechanisms, and ensuring compliance with Indian regulatory requirements, including the Companies Act 2013, SEBI regulations, and FEMA guidelines where applicable. The document typically includes detailed provisions for share transfers, management rights, board composition, reserved matters, and exit mechanisms, making it essential for both domestic and international business structures operating in India. It serves as the primary governing document for the holding company's operations and helps prevent future disputes by clearly outlining rights, responsibilities, and procedures.
