FOREIGN ACQUISITIONS AND TAKEOVERS ACT 1975 - SECT 21 Meanings of subsidiary and holding entity

FOREIGN ACQUISITIONS AND TAKEOVERS ACT 1975 - SECT 21

Meaning of subsidiary

  (1)   An entity (the lower entity ) is a subsidiary of another entity (the higher entity ) if:

  (a)   the higher entity:

  (i)   is in a position to control more than half the voting power in the lower entity; or

  (ii)   holds more than half the issued securities in the lower entity (disregarding any securities that carry no right to participate beyond a specified amount in a distribution of either profits or capital); or

  (b)   the lower entity is a subsidiary of an entity that is the higher entity's subsidiary (including because of one or more applications of this subsection).

Note:   The lower entity need not be the immediate subsidiary of the higher entity under paragraph   (1)(a) (see section   23 which provides that a person may control the voting power in an entity directly or indirectly, and section   19 which provides that a person is taken to hold interests in securities that are traced through a chain of corporations, trusts or unincorporated limited partnerships).

  (2)   In determining whether a lower entity is a subsidiary of a higher entity, disregard any securities held or power exercisable by:

  (a)   the higher entity in a fiduciary capacity; or

  (b)   any person as a result of a debenture of the lower entity; or

  (c)   any person as a result of a trust deed for securing the issue of a debenture of the lower entity.

  (3)   In determining whether a lower entity is a subsidiary of a higher entity, any securities held or power exercisable:

  (a)   by any person as a nominee for the higher entity; or

  (b)   by, or by a nominee for, a subsidiary of the higher entity;

are taken to be held or exercisable by the higher entity.

Meaning of holding entity

  (4)   An entity (the higher entity ) is a holding entity of another entity (the lower entity ) if the lower entity is a subsidiary of the higher entity.