If a parent company is a close company under CTA2010 s439 then does this make all 100% owned subsidiaries of said company also close companies? Thanks for any guidance given.
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It's not unlikely, but it's not certain. The most obvious exception would be subsidiaries that are not resident in the UK. Presumably too if the company is close by virtue of (2)(b) only, it does not follow that subs would necessarily be close.
Yes. on the basis that by "subsidiaries", you do mean 51% subsidiaries, then they will be close companies if the parent company is a close company (on whatever basis).
The reason being that they are controlled by 5 or fewer participators - they are controlled by a single participator - and are not precluded by s 444 from being a close company. S 442(a) has been eliminated from being relevant.
"Person" means a legal person, which includes both real persons (individuals) and artificial persons (bodies corporate).
Incidentally, we're not interested in who the partcipators are, but whether there is an irreducible group of persons that control it and either:
- number 5 or fewer (less BKD!), or
- who are all directors.
You note that there is a director who has in excess of 50%. Whilst it is true that he is a director, notwithstanding that he is a director, he is also an irreducible group of persons (numbering fewer than 6) that has control. That means that s 439(2)(a) is satisfied - not that it has any impact on the application of the tests to the subsidiaries.
The only definition of the word "person" that I am aware of is in the Interpretation Act 1978, Sch 1.