I have 3 client companies:
- Company A is owned 30% by Mr X, 25% by Mrs X, 20% each by their adult son and daughter and 5% by a non-family employee. Mr & Mrs X are the directors.
- Company B is owned 100% by the son, who is the only director. However, the company is run by Mr X and the son is barely involved.
- Company C is owned 100% by the daughter, who is the only director. However, the company is run by Mr X and the daughter is barely involved.
Companies A and B trade from the same premises. Company B sells only to Companies A & C. The majority of Company C's sales are to Company A, but there are other external customers. Company A is a massive loan creditor of Company C. There is therefore substantial commercial and financial interdependence.
- Are all or any combination of two of the companies associated for the purpose of the CT small profit rate threshold?
- Are all or any combination of two of the companies related parties for disclosure in the small company accounts under the FRSSE?
My first impression is that all the companies are associated and related because when there is substantial commercial interdependence, you attribute the shares held by family members. My doubt is that while this would give Mr X 95% control of Company A, I am not sure if this extends to attributing to him the shares held by the family members in the other two companies, giving him 100% of Companies B & C.