Part 5Enterprise investment scheme

Chapter 2The investor

Meaning of connection with issuing company

170Persons interested in capital etc of company

1

An individual is connected with the issuing company if the individual directly or indirectly possesses or is entitled to acquire more than 30% of—

a

the ordinary share capital of the company or any subsidiary of the company,

b

the F4... issued share capital of the company or any such subsidiary, or

c

the voting power in the company or any such subsidiary.

2

An individual is connected with the issuing company if the individual directly or indirectly possesses or is entitled to acquire such rights as would—

a

in the event of the winding up of the company or any subsidiary of the company, or

b

in any other circumstances,

entitle the individual to receive more than 30% of the assets of the company or subsidiary (“the company in question”) which would then be available for distribution to equity holders of the company in question.

3

For the purposes of subsection (2)—

a

the persons who are equity holders of the company in question, and

b

the percentage of the assets of the company in question to which the individual would be entitled,

are determined in accordance with F1Chapter 6 of Part 5 of CTA 2010.

4

In making that determination—

a

references in F2section 166 of that Act to company A are to be read as references to an equity holder, and

b

references in that F3section to a winding up are to be read as including references to any other circumstances in which assets of the company in question are available for distribution to its equity holders.

5

An individual is not connected with a company merely because one or more shares in the company are held by the individual or by an associate of the individual, at a time when the company—

a

has not issued any shares other than subscriber shares, and

b

has not begun to carry on, or make preparations for carrying on, any trade or business.

6

An individual is connected with the issuing company if the individual has control of the issuing company or of any subsidiary of that company.

7

In this section “subsidiary”, in relation to the issuing company, means a company which at any time in period A is a 51% subsidiary of the issuing company, whether or not it is such a subsidiary while the individual concerned has, or is entitled to acquire, such capital, voting power, rights or control as are mentioned in this section.

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9

For the purposes of this section—

a

an individual is treated as entitled to acquire anything which the individual is entitled to acquire at a future date or will at a future date be entitled to acquire, and

b

there is attributed to any individual any rights or powers of any other person who is an associate of the individual.

F610

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