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GLOSSARY

Subsidiary definition

Published by a LexisNexis Corporate expert

What does Subsidiary mean?

There are two suggested definitions for the term 'subsidiary', as commonly used in agreements. CA 2006, s 1159 provides that a company is a holding company of another company (its subsidiary) if it satisfies one of three tests, two of which require it to be a member of the other company (as well as to possess certain rights, which go to its voting powers). Membership of a company is a question of fact and the court has found that if a company (company A) has transferred shares in another company (company B) to a lender in connection with the taking of security and the name of that lender or the lender’s nominee has been entered in the register of members, then company A is not a member of company B in respect of those shares: see Enviroco Ltd v Farstad Supply A/S.

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Funding an employee benefit trust

Funding an employee benefit trust This Practice Note covers the following issues in relation to the funding of an employee benefit trust (EBT): • practical aspects of funding an EBT • financial assistance—the background • financial assistance—the current position • relevance of financial assistance to EBTs • financial assistance—exemptions • the employees’ shares scheme exemption • consequences of non-compliance of the financial assistance provisions • tax implications for close companies which fund EBTs, and • corporation tax relief in respect of EBT funding Practical aspects of funding an EBT When an EBT is first set up, it needs to be provided with initial financing, as a trust cannot exist without initial trust assets. It is common for a nominal amount, for example £100, to be settled on the trustee in order to establish the EBT (for further details, see Practice Note: Setting up an EBT). However, after the EBT has established, other funding can be provided. This may be by way of: • voluntary contribution • loan...

The Modern Slavery Act 2015—multinational organisations and groups of companies

The Modern Slavery Act 2015—multinational organisations and groups of companies This Practice Note explains how the transparency in supply chains (TISC) provisions in section 54 of the Modern Slavery Act 2015 (MSA 2015) apply to multinational organisations and groups of companies. It considers a number of key issues these organisations may face in preparing a slavery and human trafficking statement. It signposts relevant practical guidance and resources to help organisations to manage modern slavery and human trafficking risk and prepare an annual slavery and human trafficking statement. Why this matters Commercial organisations that meet the following criteria are required to publish an annual slavery and human trafficking statement on their website: • supply goods or services • carry on business wholly or in part in the UK, and • have an annual global turnover of £36m or more The statement must outline the steps taken (if any) during each financial year to ensure slavery and human trafficking is not taking place in any part of their business or global supply...

Discover our 22 Practice Notes on Subsidiary

Share purchase agreement—super short form

Share purchase agreement—super short form This Agreement is made on [insert day and month] 20[insert year] Parties 1 [Insert name of selling corporate entity] incorporated in [England and Wales OR [insert country of incorporation]] with registered number [insert company number] whose registered office is at [insert address] (the Seller), and 2 [Insert name of purchasing corporate entity] incorporated in [England and Wales OR [insert country of incorporation]] with registered number [insert company number] whose registered office is at [insert address] (the Buyer), [(each of the Seller and the Buyer being a Party and together the Seller and the Buyer are the Parties).] Background (A) The Company (as defined below) is a private company limited by shares and is incorporated in [England and Wales OR [insert country of incorporation]]. Details of the Company are set out in Schedule 1[, Part A]. (B) The Seller is the legal and beneficial owner of the Sale Shares (as defined below), being in aggregate the entire...

Sanctions warranty provisions—asset purchase agreement—pro-seller—corporate seller—unconditional—long form

Sanctions warranty provisions—asset purchase agreement—pro-seller—corporate seller—unconditional—long form Insert the following definitions as new definitions into clause 1 of Precedent: Asset purchase agreement—pro-seller—corporate seller—unconditional—long form: 1 Definitions and interpretation Sanctioned Activity • means any activity subject to sanctions imposed by the Sanctioning Body; Sanctioning Body • means the United Kingdom, United States of America, European Union and any other applicable local, national or multinational government agency, department, official parliament, public or statutory person or any government or professional body, regulatory or supervisory authority, board or other body responsible for imposing and/or administering sanctions; Sanctioned Entity • means any person or entity which is, or which is owned or controlled directly or indirectly by a person or entity which is, the subject of sanctions imposed by, or on a designated sanctions list by, a Sanctioning Body, and in this clause 1, the words ‘owned or controlled directly or indirectly’ have the meaning given in applicable Sanctions Laws; Sanctions Laws • means all applicable law relating to a Sanctioned Activity, applicable to either...

Dive into our 7 Precedents related to Subsidiary

Property Disputes weekly highlights—10 April 2025

This week's edition of Property Disputes weekly highlights includes: High Court decisions concerning a claimant’s right to recover property transferred under an unauthorised agreement, a Court of Appeal decision concerning whether a boundary agreement binds successors in title and Upper Tribunal decisions concerning an appeal regarding the quantum of rent repayment orders and the determination of service charges payable under a lease. It also includes news analyses on 100 years since the Law of Property Act 1925 and the first-ever building liability order and information orders awarded under Building Safety Act 2022, the partial coming into force of the Terrorism (Protection of Premises) Act 2025 and publication of the Civil Justice Council’s final report on modernising civil enforcement processes.

Competition weekly highlights—10 April 2025

This week's edition of Competition weekly highlights includes, from a UK perspective: (1) publication by the CMA of a report analysing past industrial policies to inform the government’s design of a new industrial strategy, and (2) publication of the government’s response and refinements to the subsidy control regime following consultation. This week's highlights also includes, from an EU perspective: (1) an AG opinion concerning a national reference from the Netherlands regarding jurisdictional issues in two cartel damages actions, and (2) an AG opinion concerning a national reference from Spain seeking clarification on the limitation period in the context of a damages claim for infringement of competition law.

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