CH 19 - Close Company Definition Flashcards
What is a close company
- resident in the UK; and
- controlled by either:
- > 5 or fewer participators (shareholders); or
- > any number of participator directors.
In looking at a person’s shareholding we consider shares held by their associates.
(CTA 2010, s.439)
What includes an ‘associate’ for purpose of a close company?
associate includes
- spouse or civil partner,
- parents and remoter forebears,
- children and remoter issue, and
- siblings.
(CTA 2010, s.448)
When in a context of a director (for close company rules) includdes any manager of the company with associate?
When any manager of the company who, with their associates, owns 20% or more of the voting shares of the company
(CTA 2010, s.452)
What company types can not be a close companies ?
The following companies will not be close companies:
* non-resident companies;
* registered industrial and provident societies, and building societies;
* companies controlled on behalf of the Crown;
* companies controlled by open companies;
* quoted companies with substantial public interest.
When a quoted company exception only applies?
if the company is quoted on the stock exchange with dealings in its shares in the last 12 months .
In addition, the principal members must hold no more than 85% of the votes and the public at least 35% .
Who can not be considered as a member of the public in a quoted company exception test of at least 35%?
Directors and their associates can never be members of the public.
Non-close companies and open pension funds can be members of the public even if they are principal members .
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The principal members are the five biggest shareholders who each hold more than 5% of the voting power in the company.
