SCHEDULE 16GROUP RELIEF

PART 3RESTRICTIONS ON AVAILABILITY OF RELIEF

Certain arrangements not within paragraph 4: joint venture companies

I15

1

Arrangements entered into by a joint venture company which, apart from this paragraph, would be arrangements to which paragraph 4 applies are not to be treated as such arrangements if and so long as—

a

the arrangements fall within sub-paragraph (2), and

b

none of the contingencies mentioned in sub-paragraph (3) to which the arrangements relate has occurred.

2

Arrangements fall within this sub-paragraph if they are—

a

an agreement which provides for the transfer of shares or securities in the joint venture company to one or more members of that company on, or as a result of, one or more contingencies mentioned in sub-paragraph (3) occurring, or

b

a provision in a constitutional document of the joint venture company which provides for the suspension of a member's voting rights on, or as a result of, one or more of those contingencies occurring.

3

The contingencies referred to in sub-paragraphs (1)(b) and (2) are—

a

the voluntary departure of a member,

b

the commencement of the liquidation, administration, administrative receivership or receivership of, or the entering into of a voluntary arrangement by, a member under the Insolvency Act 1986 (c. 45) or the Insolvency (Northern Ireland) Order 1989 (S.I.1989/2405 (N.I.19)) or the commencement, or entering into, of equivalent proceedings or arrangements under the law of any country or territory outside the United Kingdom,

c

a serious deterioration in the financial condition of a member,

d

a change of control of a member,

e

a default by a member in performing its obligations under any agreement between the members or with the joint venture company (which, for this purpose, includes any constitutional document of the joint venture company),

f

an external change in the commercial circumstances in which the joint venture company operates such that its viability is threatened,

g

an unresolved disagreement between the members, and

h

any contingency of a similar kind to that mentioned in any of paragraphs (a) to (g) which is provided for, but not intended to happen, when the arrangements in question were entered into.

4

This paragraph does not apply if a member could, alone or together with connected persons, dictate the terms or timing of—

a

the transfer of shares or securities, or

b

the suspension of a member's voting rights,

in advance of one or more of the contingencies occurring.

5

For the purposes of sub-paragraph (4), members are not connected with each other by reason only of their membership of the joint venture company.

6

In this paragraph—

  • “"constitutional document”” (“"dogfen gyfansoddiadol”") means a memorandum of association, articles of association or any other similar document regulating the affairs of the joint venture company;

  • “"joint venture company”” (“"cwmni cyd-fenter”") means a company which—

    1. a

      has two or more member companies, and

    2. b

      carries on a commercial activity governed by an agreement regulating the affairs of its members;

  • “"member”” (“"aelod”") means a holder of shares or securities in the joint venture company.