Companies (Amendment) Act, 1986

Exemption for subsidiaries from section 7 .

17.—(1) Where a private company is a subsidiary of another body corporate formed and registered in a Member State of the European Communities, or would be a subsidiary of that other body corporate if that other body corporate were a company, the company shall, as respects any particular financial year of the company, stand exempted from the provisions of section 7 (other than subsection (1) (b)) of this Act if, but only if, the following conditions are fulfilled:

(a) every person who is a shareholder of the company on the date of the holding of the next annual general meeting of the company after the end of that financial year, shall declare his consent to the exemption,

(b) there is in force in respect of the whole of that financial year an irrevocable guarantee by the other body corporate of the liabilities of the company referred to in section 5 (c) of this Act in respect of that financial year and the company has notified in writing every person referred to in paragraph (a) of this subsection of the guarantee,

(c) the annual accounts of the company for that financial year are consolidated in the group accounts prepared by the body corporate and the exemption of the company under this section is disclosed in a note to the group accounts,

(d) a notice stating that the company has availed of the exemption under this section in respect of that financial year and a copy of the guarantee and notification referred to in paragraph (b) of this subsection, together with a declaration by the company in writing that paragraph (a) of this subsection has been complied with in relation to the exemption, is annexed to the annual return for that financial year made by the company under the Principal Act to the registrar of companies,

(e) the group accounts of the other body corporate are drawn up as far as possible in accordance with the requirements of the Fourth Council Directive* , and

(f) the group accounts of the other body corporate are annexed to the annual return aforesaid and are audited in accordance with Article 51.1 of the said Fourth Council Directive.

(2) The Minster may make such orders (if any) as may be necessary for the purpose of enabling this section to have full effect.

Council Directive No. 78/660/EEC (OJ No. L 222 of 14.8.1978).