Meaning of “holding company” and “subsidiary.”
155.—(1) For the purposes of this Act, a company shall, subject to subsection (3), be deemed to be a subsidiary of another if, but only if—
(a) that other—
(i) is a member of it and controls the composition of its board of directors, or
(ii) holds more than half in nominal value of its equity share capital, or
(iii) holds more than half in nominal value of its shares carrying voting rights (other than voting rights which arise only in specified circumstances); or
(b) the first-mentioned company is a subsidiary of any company which is that other's subsidiary.
(2) For the purposes of subsection (1), the composition of a company's board of directors shall be deemed to be controlled by another company if, but only if, that other company by the exercise of some power exercisable by it without the consent or concurrence of any other person can appoint or remove the holders of all or a majority of the directorships; but for the purposes of this provision that other company shall be deemed to have power to appoint to a directorship in relation to which any of the following conditions is satisfied—
(a) that a person cannot be appointed thereto without the exercise in his favour by that other company of such a power as aforesaid; or
(b) that a person's appointment thereto follows necessarily from his appointment as director of that other company.
(3) In determining whether one company is a subsidiary of another—
(a) any shares held or power exercisable by that other in a fiduciary capacity shall be treated as not held or exercisable by it;
(b) subject to paragraphs (c) and (d), any shares held or power exercisable—
(i) by any person as a nominee for that other (except where that other is concerned only in a fiduciary capacity); or
(ii) by, or by a nominee for, a subsidiary of that other, not being a subsidiary which is concerned only in a fiduciary capacity;
shall be treated as held or exercisable by that other;
(c) any shares held or power exercisable by any person by virtue of the provisions of any debentures of the first-mentioned company or of a trust deed for securing any issue of such debentures shall be disregarded;
(d) any shares held or power exercisable by, or by a nominee for, that other or its subsidiary (not being held or exercisable as mentioned in paragraph (c)) shall be treated as not held or exercisable by that other if the ordinary business of that other or its subsidiary, as the case may be, includes the lending of money and the shares are held or power is exercisable as aforesaid by way of security only for the purposes of a transaction entered into in the ordinary course of that business.
(4) For the purposes of this Act, a company shall be deemed to be another's holding company if, but only if, that other is its subsidiary.
(5) In this section “company” includes any body corporate and “equity share capital” means, in relation to a company, its issued share capital excluding any part thereof which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution.