Foreign Acquisitions and Takeovers Act 1975

PART 1 - PRELIMINARY  

Division 2 - Definitions  

Subdivision B - Some defined terms and rules of interpretation  

SECTION 21   MEANINGS OF SUBSIDIARY AND HOLDING ENTITY  

Meaning of subsidiary

21(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).

21(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.

21(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

21(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.