New South Wales Consolidated Acts

CO-OPERATIVE HOUSING AND STARR-BOWKETT SOCIETIES ACT 1998 - SECT 11

11 Interpretation-meaning of “subsidiary”

(1) Subject to subsection (5), a body corporate is a subsidiary of a co-operative housing body if:

(a) the co-operative housing body:

(i) controls the composition of the body corporate’s board of directors, or

(ii) is in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the body corporate, or

(iii) holds more than 50% of the issued share capital of the body corporate (other than any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), or

(b) the body corporate is a subsidiary of a body corporate that is a subsidiary of the co-operative housing body (including a body corporate that is a subsidiary of the co-operative housing body by another application of this paragraph).

(2) The composition of a body corporate’s board of directors is controlled by a co-operative housing body if the co-operative housing body can appoint or remove all or a majority of the directors by the exercise of a power exercisable with or without the consent or concurrence of another person.

(3) For the purposes of subsection (2), a co-operative housing body is taken to have power to make an appointment of directors if:

(a) a person cannot be appointed as director without the exercise of such a power by the co-operative housing body in the person’s favour, or

(b) a person’s appointment as a director follows necessarily from the person being a director or other officer of the co-operative housing body.

(4) Subsection (2) does not limit by implication the circumstances in which the composition of a body corporate’s board of directors is taken to be controlled by a co-operative housing body.

(5) In determining whether a body corporate is a subsidiary of a co-operative housing body:

(a) any shares held or power exercisable by the co-operative housing body in a fiduciary capacity must be treated as not held or exercisable by it, and

(b) subject to paragraphs (c) and (d), any shares held or power exercisable:

(i) by any person as a nominee for the co-operative housing body, or

(ii) by, or by a nominee for, a subsidiary of the co-operative housing body (other than a subsidiary that is concerned only in a fiduciary capacity), and

must be treated as held or exercisable by the co-operative housing body, and

(c) any shares held or power exercisable by a person under a debenture, or a trust deed for securing the issue of debentures, must be disregarded, and

(d) any shares held or power exercisable by, or by a nominee for, the co-operative housing body or its subsidiary merely by way of security given for the purposes of a transaction entered into in the ordinary course of business in connection with providing financial accommodation must be disregarded.

(6) If it is relevant to determine for the purposes of this Act whether a body corporate is a subsidiary of another body corporate that is not a co-operative housing body and subsection (1) does not apply, the first body corporate is a subsidiary of the other body corporate if it would be such a subsidiary under the Corporations Act.