Formal control of a company 043-04030020

Formal control of a private company is indicated by the following factors:

• control of 50% or more of the company voting rights
• governing director or 'A' class shares which have the power to control the company
• the person, alone or with associates, is beneficially entitled to 15% or more of the capital or dividends of the company
• the company is sufficiently influenced by the person, an associate of the person or two or more entities covered by the preceding factors
• the person (alone or with associates) is in a position to exercise control

A customer may be involved with a private company as a:

• shareholder
• director
• secretary or public officer or
• contributor

The most common role is that of a shareholder. The most common shares issued are ordinary shares, which convey the right to:

• participate in dividends
• participate in capital if the company is wound up
• vote at meetings of the shareholders

Other share types such as preference shares, convertible preference, cumulative preference, participating preference or redeemable preference shares usually do not carry voting rights and as such will not indicate control of the company.

Where a company has an even number of shares held equally by the two members of a couple, then control of the company would be joint or 50% each.

Governing director's shares are often classified as 'A' class shares. These usually give the holder the majority of voting share rights and, would indicate the ability to control the company.

Directors and the company secretary/public officer are appointed by shareholders, and as such are subject to their control. Since it is control of the company that determines attribution, being a director or secretary in its self would not indicate control unless the person held shares in the company which gave them a controlling interest.