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Companies Act 1985

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Changes over time for: Paragraph 10

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Version Superseded: 06/04/2008

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Status:

Point in time view as at 01/10/2007. This version of this provision has been superseded. Help about Status

Changes to legislation:

There are currently no known outstanding effects for the Companies Act 1985, Paragraph 10. Help about Changes to Legislation

10(1)The conditions for accounting for an acquisition as a merger are—

(a)that at least 90 per cent. of the nominal value of the relevant shares in the undertaking acquired [F1(excluding any shares in the undertaking held as treasury shares)] is held by or on behalf of the parent company and its subsidiary undertakings,

(b)that the proportion referred to in paragraph (a) was attained pursuant to an arrangement providing for the issue of equity shares by the parent company or one or more of its subsidiary undertakings,

(c)that the fair value of any consideration other than the issue of equity shares given pursuant to the arrangement by the parent company and its subsidiary undertakings did not exceed 10 per cent. of the nominal value of the equity shares issued, and

(d)that adoption of the merger method of accounting accords with generally accepted accounting principles or practice.

(2)The reference in sub-paragraph (1)(a) to the “relevant shares” in an undertaking acquired is to those carrying unrestricted rights to participate both in distributions and in the assets of the undertaking upon liquidation.

Textual Amendments

F1Words in Sch. 4A para. 10(1)(a) inserted (1.12.2003) by The Companies (Acquisition of Own Shares)(Treasury Shares) Regulations 2003 (S.I. 2003/1116), reg. 4, {Sch. para. 31}

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