Section 3: Meaning of “holding company” and “subsidiary”

3. Meaning of “holding company” and “subsidiary” (1) In this section— “company” includes a corporation. (2) For the purposes of this Act, a company shall be a subsidiary of another company where— (a) that other company or corporation, referred to as the parent— (i) controls the composition of the Board of the company; (ii) is in a position to exercise, or control the exercise of, more than one half the maximum number of votes that can be exercised at a meeting of the company; (iii) holds more than one half of the issued shares of the company, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital; or (iv) is entitled to receive more than one half of every dividend paid on shares issued by the company, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital; or (b) the company is a subsidiary of a company that is the parent’s subsidiary. (3) For the purposes of this Act, a company shall be another company’s holding company only where that other company is its subsidiary. (4) For the purposes of this Act— (a) a company shall be the “ultimate holding company” of another company provided— (i) the other company is a subsidiary of the first mentioned company; and C35 – 21 [Issue 10] Companies Act (ii) the first mentioned company is not itself a subsidiary of any company; (b) “the ultimate holding company in Mauritius”, in relation to a company incorporated in Mauritius, means a holding company which is not a subsidiary of a company incorporated in Mauritius. (5) A company shall be deemed to be the wholly owned subsidiary of another corporation, referred to as “the parent”, provided the members of the company do not include any person apart from— (a) that other corporation; (b) a nominee of that other corporation; (c) a subsidiary of that other corporation being a subsidiary the members of which do not include any person apart from that other corporation or a nominee of that other corporation; or (d) a nominee of such a subsidiary. (6) A company shall be deemed to be the virtually wholly owned subsidiary of another corporation referred to as “the parent” provided the parent owns 90 per cent or more of the voting power in that company.