Section 257MNB | Section 257MNA: supplementary ^F1F2

(1)In section 257MNA(2) the reference to relevant investments “made in the social enterprise” includes—^F1F2

(a)relevant investments made in a company which, at the material date, is or has been a 51% subsidiary of the social enterprise,^F1F2

(b)any other relevant investment made in a company to the extent that the money raised by that relevant investment has been employed for the purposes of a trade carried on by another company (“company X”) which, at the material date, is or has been a 51% subsidiary of the social enterprise, and^F1F2

(c)any other relevant investment made in a company if—^F1F2

(i)the money raised by that relevant investment has been employed for the purposes of a trade carried on by that company or another person, and^F1F2

(ii)after that relevant investment was made, but on or before the material date, that trade became a transferred trade (see subsection (5)).^F1F2

(2)The investments within paragraph (a) of subsection (1)—^F1F2

(a)include investments made in a company mentioned in that paragraph before it became a 51% subsidiary of the social enterprise, but^F1F2

(b)where a company mentioned in that paragraph is not a 51% subsidiary of the social enterprise at the material date, do not include any investments made in that company after it last ceased to be such a subsidiary.^F1F2

(3)For the purposes of subsection (1)(b), where company X is not a 51% subsidiary of the social enterprise at the material date, any money employed after company X last ceased to be such a subsidiary is to be ignored.^F1F2

(4)Where only a proportion of the money raised by a relevant investment is employed for the purposes of a trade which becomes a transferred trade, only the corresponding proportion of that relevant investment is to be treated as falling within subsection (1)(c).^F1F2

(5)For the purposes of this section, if—^F1F2

(a)on or before the material date a trade is transferred—^F1F2

(i)to the social enterprise,^F1F2

(ii)to a company which, at the material date, is or has been a 51% subsidiary of the social enterprise, or^F1F2

(iii)to a partnership of which the social enterprise, or a company within sub-paragraph (ii), is a member, and^F1F2

(b)the trade or part of it was at any time before the transfer carried on by another person,^F1F2

the trade or part mentioned in paragraph (b) becomes a “ transferred trade ” when it is transferred as mentioned in paragraph (a).

(6)The cases within subsection (5)(a)—^F1F2

(a)include the case where the trade is transferred to a company within subsection (5)(a)(ii), or a partnership of which such a company is a member, before the company became a 51% subsidiary of the social enterprise, but^F1F2

(b)where a company within subsection (5)(a)(ii) is not a 51% subsidiary of the social enterprise at the material date, do not include the case where the trade is transferred to that company, or a partnership of which that company is a member, after that company last ceased to be such a subsidiary.^F1F2

(7)In this section—^F1F2

“the material date” means the date on which the investment is made;

“relevant investment” has the meaning given by section 173A(3) (reading references in section 173A(3) to a company as including any social enterprise).

(8)Section 173A(4) and (5) apply to determine for the purposes of this section when a relevant investment is made.^F1F2

(9)Section 173A(6) and (7) (meaning of “trade” etc) apply also for the purposes of this section.^F1F2