Co-operative and Community Benefit Societies Act 2014

100 Meaning of company being a “subsidiary” of a society

(1) For the purposes of this Part, a company is a subsidiary of a registered society if—

(a) the society is a member of the company and controls the composition of its board of directors, or

(b) the society holds more than half in nominal value of the company’s equity share capital.

(2) For this purpose, a society is regarded as controlling the composition of a company’s board of directors if the society, by exercising a power exercisable by it without the consent or concurrence of any other person, can appoint or remove the holders of all or a majority of the directorships.

(3) For the purposes of subsection (2), a society is treated as having power to appoint to a directorship if—

(a) a person can be appointed to it only if the society exercises a power of a kind mentioned in that subsection in favour of the person,

(b) a person’s appointment to it follows necessarily from the person’s appointment as a member of the society’s committee, or

(c) the directorship is held by the society.

(4) In determining whether a company is a subsidiary of a registered society—

(a) any shares held or power exercisable by the society in a fiduciary capacity are treated as not held or exercisable by it;

(b) subject to paragraphs (c) and (d), any shares held or power exercisable by any person as a nominee for the society are treated as held or exercisable by the society (but this does not apply where the society is concerned only in a fiduciary capacity);

(c) no account is to be taken of any shares held or power exercisable by any person by virtue of the provisions of—

(i) any debentures of the company, or

(ii) a trust deed for securing any issue of such debentures;

(d) any shares held or power exercisable by the society or a nominee for the society (not being held or exercisable as mentioned in paragraph (c)) are treated as not held or exercisable by the society if—

(i) the ordinary business of the society includes the lending of money, and

(ii) the shares are held or power is exercisable by way of security only for the purposes of a transaction entered into in the ordinary course of that business.

(5) For the meaning of “company” and “equity share capital” see section 102.