Income Tax Assessment Act 1997
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Hide history noteSECTION 165-115Z What constitutes a controlling stake in a company 165-115Z(1)
An entity has a controlling stake in a company at a particular time if the entity, or the entity and the entity ' s *associates between them:
(a) are able at that time to exercise, or control the exercise of, more than 50% of the voting power in the company (either directly, or indirectly through one or more interposed entities); or
(b) have at that time the right to receive (either directly, or indirectly through one or more interposed entities) more than 50% of any dividends that the company may pay; or
(c) have at that time the right to receive (either directly, or indirectly through one or more interposed entities) more than 50% of any distribution of capital of the company.
Note 1:
The effect of subsection (1) is that, if an entity has a controlling stake in a company, each associate of the entity also has a controlling stake in the company.
Note 2:
Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters.
165-115Z(2)
If:
(a) apart from this subsection, an interest that gives an entity and its *associates (if any):
(i) the ability to exercise, or control the exercise of, any of the voting power in a company; or
(ii) the right to receive dividends that a company may pay; or
would, in the application of paragraph (1)(a), (b) or (c), be counted more than once; and
(iii) the right to receive a distribution of capital of a company;
(b) the interest is both direct and indirect;
only the direct interest is to be counted.
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