Section 942 | Options that may be applied for the purposes of the ownership condition

(1)The options referred to in section 941(6) are as follows (with references in the options to “the trading company” being to the company to which the interest in the trade belongs as mentioned in that subsection).

Option 1The interest in the trade is taken to belong to the persons owning the ordinary share capital of the trading company in proportion to the amount of their holdings of that capital.

Option 2This option can be applied if the trading company is the subsidiary of another company (see subsection (2)). The interest in the trade is taken to belong to—

(a)a company that is a parent company of the trading company (see subsection (3)), or

(b)the persons owning the ordinary share capital of such a parent company in proportion to the amount of their holdings of that capital.

Option 3This option can be applied if—That interest in the trade is instead taken to belong to P.

(a)a person (“P”) has management control over a company (see subsections (4) and (5)), and

(b)by applying Option 1 or 2 an interest in the trade can be taken to belong to that company.

(2)For the purposes of this section a company (“company A”) is a subsidiary of another company (“company B”) if at least 75% of company A's ordinary share capital is owned by company B.

(3)If company A is a subsidiary of company B, company B is a parent company of company A unless both are subsidiaries of a third company.

(4)For the purposes of subsection (1) a person has management control over a company if the person has the power to secure that the affairs of the company are conducted in accordance with the wishes of the person.

(5)“Power” in subsection (4) means power resulting from—

(a)the holding of shares or the possession of voting rights in or in relation to any company, or

(b)a document regulating any company.

(6)In this section references to a person owning ordinary share capital are to be read, if the person is a company, as references to the company owning the capital—

(a)directly,

(b)through another company or companies, or

(c)partly directly and partly through another company or companies.

(7)If a company owns ordinary share capital as mentioned in subsection (6)(b) or (c), the amount of the capital owned by the company is determined in accordance with sections 1155 to 1157.

(8)In this section references to ownership are references to beneficial ownership.