(1)For the purposes of this Chapter, one body corporate is associated with another if one of them has a significant interest in the other or a third body corporate has a significant interest in both of them; and subsections (2) to (5) set out the circumstances in which one body corporate (“A”) has a significant interest in another (“B”).
(2)Where B is a company, A has a significant interest in B if A possesses or is entitled to acquire—
(a)20% or more of the issued share capital of B,
(b)such rights as would entitle A to exercise 20% or more of the votes exercisable in general meetings of B,
(c)such part of the issued share capital of B as would entitle A to 20% or more of the amount distributed if the whole of the income of B were in fact distributed among the shareholders, or
(d)such rights as would, in the event of the winding up of B or in any other circumstances, entitle it to receive 20% or more of the assets of B which would then be available for distribution among the shareholders.
(3)Where B is a limited liability partnership, A has a significant interest in B if A—
(a)holds 20% or more of the voting rights in B,
(b)is a member of B and has a right to appoint or remove 20% or more of other members, or
(c)is a member of B and controls alone, or pursuant to an agreement with other members, 20% or more of the voting rights in B.
(4)In subsection (3)(a) and (c) the references to “voting rights” are to the rights conferred on members in respect of their interest in a limited liability partnership to vote on those matters which are to be decided on by a vote of the members of the limited liability partnership.
(5)In any case, A has a significant interest in B if A has the power, directly or indirectly, to secure that the affairs of B are conducted in accordance with A’s wishes.
(6)In determining whether, by virtue of this section, A has a significant interest in B, A shall be taken to possess—
(a)any rights and powers possessed by a person as nominee for A, and
(b)any rights and powers possessed by a body corporate which A controls (including rights and powers which such a body corporate would be taken to possess by virtue of this paragraph).
(7)In order to determine whether one body corporate controls another for the purposes of subsection (6)(b), subsections (2) to (5) and (6)(a) are to be applied, but as if—
(a)for “has a significant interest in” in each place there were substituted “controls”, and
(b)for “20%” in each place there were substituted “50%”.