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The first corporation holds voting control over the other corporation if the first corporation has the ability to cast, or control the casting of, at least 90% of the maximum number of votes that may be cast at a general meeting of that corporation.
Voting control example
The example below demonstrates how Company A has voting control over the subsidiary companies.
Company B
Company B is a subsidiary of Company A as Company A holds 100% of the shares in, and has voting control over, Company B.
Company C
Company C is a subsidiary of Company B as Company B holds 100% of the shares in, and has voting control over, Company C.
Therefore, company B is the parent corporation of company C.
As company B is a subsidiary of company A, company C is also a subsidiary of company A.
Company D
Company D is a subsidiary of Company C as Company C holds 100% of the shares in, and has voting control over, company D.
Therefore, company C is the parent corporation of Company D.
Because Company C is a subsidiary of Companies B and A, Company D is also a subsidiary of Companies A and B.
Company E
Company E is a subsidiary of Company A as Company A holds 100% of the shares in, and has voting control over, Company E.
Company F
Company A is indirectly the parent corporation of Company F, even though no one company holds 100% of its issued shares, nor has voting control, over it. Company F is a subsidiary of Company A because Company A, with its subsidiary Company E, holds 90% of the issued shares in, and has voting control over, Company F.
Company A
As Company A has voting control over B, C, D, E and F
Company A is considered the parent corporation and
Companies B, C, D, E and F are subsidiaries of Company A.
Stapled securities are where two or more securities are generally related and bound together through one vehicle.
Typically, stapled securities consist of one trust unit and one share in the funds management company that cannot be traded separately.
Stapled securities are created when two or more different securities are contractually bound together so that they cannot be sold separately.
Many different types of securities can be stapled together. For example, many property trusts have their units stapled to the shares of companies with which they are closely associated.
The ‘corporate group’ for a corporation, all of the securities of which are stapled to the securities of one or more other corporations, includes all of those other corporations and their subsidiaries.
A corporation that is a ‘unit trust scheme’ is taken to be a member of a corporate group for the purposes of a corporate reconstruction transaction if the transaction is between:
the trustee of the unit trust scheme, acting as trustee of the scheme, and
another corporation that is a member of the same corporate group as the unit trust scheme.
A unit trust is not a member of the group unless members of the group hold at least 90% of the units. This applies even is the trustee is a member of the group.
A unit trust can be the parent of the group - with individuals as unit holders, just as individuals would be shareholders of a parent company.
Both registered and unregistered Managed Investment Schemes (MISs) may be members of a corporate group.
A reference to a trustee of a registered managed investment scheme in the group includes a custodian of the trustee of the scheme acting as custodian of the trustee of that scheme - see subsections 273E(5) & (5A).
It does not extend to a custodian of the trustee of an unregistered scheme.
Corporate reconstruction arrangements can involve multiple steps. This may involve moving the same property more than once (either directly or indirectly) under separate eligible transactions. Each transaction will attract duty at the concessional rate of 10% of the duty otherwise payable.
