Parent and subsidiary undertakings

258Parent 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 it has a participating interest in the undertaking and—

a

it actually exercises a dominant influence 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.