Q&As

Is there any guidance as to the appropriateness of defining ‘Control’ as either (a) in accordance with section 1124 of the Corporation Tax Act 2010, or as (b) the beneficial ownership of more than 50% of the issued share capital of a company or the legal power to direct or cause the direction of the general management of the company?

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Published by a ˾ҹ Tax expert
Published on: 23 August 2019
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The Drafting Notes to clause: Control definition state:

‘…two options are offered in the suggested definition of the term “control”. The first option is that this term is defined by reference to section 1124 of the Corporation Tax Act 2010; this is a comprehensive, but complex definition. The second option may be more appropriate for straightforward transactions.’

Often in commercial contracts, the term ‘change of control’ is construed by reference to the definition of ‘control’. Therefore, how complex the structure of the parties to the contract, the type of transaction being entered into, the intentions of the parties, the bargaining power of the parties, and the clause within which control is used will be a factor in determining which definition of control

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Beneficial ownership definition
What does Beneficial ownership mean?

Equitable (as opposed to legal) ownership.

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