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(1)For the purposes of section 82(7)(d) and (9)(a) a person is an associate of another if—
(a)either or both of them is a body corporate, and
(b)one of them controls the other, or both are controlled by the same person or persons,
and subsections (2) to (6) set out the circumstances in which one person (“A”) controls another (“B”).
(2)Where B is a company, A controls B if A possesses or is entitled to acquire—
(a)one half or more of the issued share capital of B,
(b)such rights as would entitle A to exercise one half 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 one half 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 one half 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 controls B if A—
(a)holds a majority of the voting rights in B,
(b)is a member of B and has a right to appoint or remove a majority of other members, or
(c)is a member of B and controls alone, or pursuant to an agreement with other members, a majority 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 interests 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 controls 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 subsections (2) to (5), A controls B, A shall be taken to possess—
(a)any rights and powers possessed by a person as nominee for it, and
(b)any rights and powers possessed by a body corporate which it controls (including rights and powers which such a body corporate would be taken to possess by virtue of this paragraph).
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
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Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.
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