Who controls this company?

Who controls this company?

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A company is to be owned by Mr W, Mr R, Mr O and Mrs O, and each will own 25% of the share capital. Mr & Mrs O are married but otherwise there are no associates. Please ignore casting votes, voting rights, assets on winding up etc..

Am I correct in arriving at 4 minimum controlling combinations (MCC) as follows:

Mr W and Mr O
Mr W and Mrs O
Mr R and Mr O
Mr R and Mrs O?

Now, if it were decided to give a casting vote to any one of the four, how would that change matters?

I believe that if the casting vote were given to Mr O or Mrs O, there would be 2 MCCs as follows:

Mr O only
Mrs O only

I believe that if the casting vote were given to Mr W, there would be 3 MCCs as follws:

Mr W and Mr R
Mr W and Mr O
Mr W and Mrs O

(I will ignore a casting vote being given to Mr R as that would be an equivalent scenario to it being given to Mr W.)

Does anyone agree or disagree please?

Could HMR&C pick and choose any MCC it wanted in each scenario to suit its purpose?

Many thanks.
Tony P

Replies (2)

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By User deleted
25th Aug 2005 13:38

Thanks Nicki
I'll look forward to reading your article.

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By Taxi
23rd Aug 2005 21:05

IR will use any mcc or "irreducible group" that they fancy.
There is no hierachy as to which control test they use, so you need to examine loan creditors, and rights on winding up if these are different than voting rights.
Your various mccs are right, but it depends if your voting rights are going to affect your rights on winding up.
I am actually in the middle of writing a piece on assoc' co's for the site as it happens, I will include some detail on this for you in the article.

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