Part VII Accounts and Audit
Chapter III Supplementary Provisions
Parent and subsidiary undertakings
258 Parent and subsidiary undertakings.
(1)
The expressions “parent undertaking” and “subsidiary undertaking” in this Part shall be construed as follows; and a “parent company” means a parent undertaking which is a company.
(2)
An undertaking is a parent undertaking in relation to another undertaking, a subsidiary undertaking, if—
(a)
it holds a majority of the voting rights in the undertaking, or
(b)
it is a member of the undertaking and has the right to appoint or remove a majority of its board of directors, or
(c)
it has the right to exercise a dominant influence over the undertaking—
(i)
by virtue of provisions contained in the undertaking’s memorandum or articles, or
(ii)
by virtue of a control contract, or
(d)
it is a member of the undertaking and controls alone, pursuant to an agreement with other shareholders or members, a majority of the voting rights in the undertaking.
(3)
For the purposes of subsection (2) an undertaking shall be treated as a member of another undertaking—
(a)
if any of its subsidiary undertakings is a member of that undertaking, or
(b)
if any shares in that other undertaking are held by a person acting on behalf of the undertaking or any of its subsidiary undertakings.
(4)
An undertaking is also a parent undertaking in relation to another undertaking, a subsidiary undertaking, if F1. . . —
F2(a)
it has the power to exercise, or actually exercises, dominant influence or control over it, or
(b)
it and the subsidiary undertaking are managed on a unified basis.
(5)
A parent undertaking shall be treated as the parent undertaking of undertakings in relation to which any of its subsidiary undertakings are, or are to be treated as, parent undertakings; and references to its subsidiary undertakings shall be construed accordingly.
(6)
Schedule 10A contains provisions explaining expressions used in this section and otherwise supplementing this section.