ABSTRACT

An undertaking is a body corporate, partnership or an unincorporated association which carries on a trade or business with or without a view to profit (Companies Act 1985, s 259(1)). An undertaking is to be treated as a member of another undertaking if any of its subsidiary undertakings is a member of that other undertaking, or if any shares in the other undertaking are held by a person acting on its or any of its subsidiary undertakings’ behalf (Companies Act 1985, s 258(3)). Accordingly, a parent undertaking will be the parent undertaking of subsidiary undertakings of its own subsidiary undertakings (Companies Act 1985, s 258(5)). The right to exercise a dominant influence over another undertaking exists if there is a right to give directions with respect to its operating and financial policies and its directors are obliged to comply with them irrespective of whether they are for the benefit of that undertaking (Companies Act 1985, Sched 10A, para 4(1)). A ‘control contract’ is a contract in writing which confers any right which is of a kind authorised by the memorandum or articles of the undertaking in relation to which the right is exercisable and which is permitted by the law under which the undertaking is established (Companies Act 1985, Sched 10A, para 4(2)).