sec.166What is a subsidiary

### sec.166 What is a subsidiary A corporation is a subsidiary of— another corporation (the holding entity ) if, under the Corporations Act , it is a subsidiary of the holding entity; or a listed unit trust (also the holding entity ) if, under subsection (4) , the corporation is a subsidiary of the holding entity. Also, each of the following is a subsidiary of the holding entity— a trustee of a trust, if the holding entity or a subsidiary of the holding entity, whether under this or another subsection, is a beneficiary of the trust (a relevant trust ); a corporation in which— the trustee of a relevant trust has an interest of 50% or more; or an interest of 50% or more is held on trust and the trustee of a relevant trust is a beneficiary of that trust. A Pty Ltd has a 51% shareholding in B Pty Ltd. B Pty Ltd has a trust interest in the C Trust of which C Pty Ltd acts as trustee. C Pty Ltd as trustee of the C trust has a 51% shareholding in D Pty Ltd. Under subsection (1) , B Pty Ltd is the subsidiary of A Pty Ltd because, under the Corporations Act , it is a subsidiary of A Pty Ltd. Under subsection (2) (a) , C Pty Ltd is the subsidiary of A Pty Ltd because B, a subsidiary of A Pty Ltd, is a beneficiary of the trust. Under subsection (1) , D Pty Ltd is the subsidiary of C Pty Ltd because, under the Corporations Act , it is a subsidiary of C Pty Ltd. Under subsection (2) (b) (i) , D Pty Ltd is the subsidiary of A Pty Ltd because C Pty Ltd, a relevant trust, has an interest of 50% or more in D Pty Ltd. In addition, a corporation or trustee of a trust is a subsidiary of a holding entity if, under subsection (1) or (2) , it is a subsidiary of a subsidiary of the holding entity. For subsection (1) (b) , a corporation is a subsidiary of a listed unit trust if it is a subsidiary of the trust under the Corporations Act , chapter 1 , part 1.2 , division 6 , applied— as if a reference to a body corporate includes a reference to a trustee of a listed unit trust; and as if section 48 (2) and (3) of that Act did not apply, to the extent the section disregards shares held or a power exercisable only in a fiduciary capacity; and with any other necessary changes. For deciding whether a trustee of a trust is a subsidiary of a holding entity under subsection (2) — a trust interest sale agreement made by the holding entity or a subsidiary of it is taken not to have been made; and a trust interest purchase agreement made by the holding entity or a subsidiary of it is taken to have been completed. In this section— trust interest purchase agreement means an uncompleted agreement, whether or not conditional, for the acquisition of an interest as a beneficiary of the trust. trust interest sale agreement means an uncompleted agreement, whether or not conditional, for the disposal of an interest as a beneficiary of the trust. s 166 amd 2010 No. 11 s 34 sub 2011 No. 20 s 78 (sec.166-ssec.1) A corporation is a subsidiary of— another corporation (the holding entity ) if, under the Corporations Act , it is a subsidiary of the holding entity; or a listed unit trust (also the holding entity ) if, under subsection (4) , the corporation is a subsidiary of the holding entity. (sec.166-ssec.2) Also, each of the following is a subsidiary of the holding entity— a trustee of a trust, if the holding entity or a subsidiary of the holding entity, whether under this or another subsection, is a beneficiary of the trust (a relevant trust ); a corporation in which— the trustee of a relevant trust has an interest of 50% or more; or an interest of 50% or more is held on trust and the trustee of a relevant trust is a beneficiary of that trust. A Pty Ltd has a 51% shareholding in B Pty Ltd. B Pty Ltd has a trust interest in the C Trust of which C Pty Ltd acts as trustee. C Pty Ltd as trustee of the C trust has a 51% shareholding in D Pty Ltd. Under subsection (1) , B Pty Ltd is the subsidiary of A Pty Ltd because, under the Corporations Act , it is a subsidiary of A Pty Ltd. Under subsection (2) (a) , C Pty Ltd is the subsidiary of A Pty Ltd because B, a subsidiary of A Pty Ltd, is a beneficiary of the trust. Under subsection (1) , D Pty Ltd is the subsidiary of C Pty Ltd because, under the Corporations Act , it is a subsidiary of C Pty Ltd. Under subsection (2) (b) (i) , D Pty Ltd is the subsidiary of A Pty Ltd because C Pty Ltd, a relevant trust, has an interest of 50% or more in D Pty Ltd. (sec.166-ssec.3) In addition, a corporation or trustee of a trust is a subsidiary of a holding entity if, under subsection (1) or (2) , it is a subsidiary of a subsidiary of the holding entity. (sec.166-ssec.4) For subsection (1) (b) , a corporation is a subsidiary of a listed unit trust if it is a subsidiary of the trust under the Corporations Act , chapter 1 , part 1.2 , division 6 , applied— as if a reference to a body corporate includes a reference to a trustee of a listed unit trust; and as if section 48 (2) and (3) of that Act did not apply, to the extent the section disregards shares held or a power exercisable only in a fiduciary capacity; and with any other necessary changes. (sec.166-ssec.5) For deciding whether a trustee of a trust is a subsidiary of a holding entity under subsection (2) — a trust interest sale agreement made by the holding entity or a subsidiary of it is taken not to have been made; and a trust interest purchase agreement made by the holding entity or a subsidiary of it is taken to have been completed. (sec.166-ssec.6) In this section— trust interest purchase agreement means an uncompleted agreement, whether or not conditional, for the acquisition of an interest as a beneficiary of the trust. trust interest sale agreement means an uncompleted agreement, whether or not conditional, for the disposal of an interest as a beneficiary of the trust. - (a) another corporation (the holding entity ) if, under the Corporations Act , it is a subsidiary of the holding entity; or - (b) a listed unit trust (also the holding entity ) if, under subsection (4) , the corporation is a subsidiary of the holding entity. - (a) a trustee of a trust, if the holding entity or a subsidiary of the holding entity, whether under this or another subsection, is a beneficiary of the trust (a relevant trust ); - (b) a corporation in which— (i) the trustee of a relevant trust has an interest of 50% or more; or (ii) an interest of 50% or more is held on trust and the trustee of a relevant trust is a beneficiary of that trust. - (i) the trustee of a relevant trust has an interest of 50% or more; or - (ii) an interest of 50% or more is held on trust and the trustee of a relevant trust is a beneficiary of that trust. - (i) the trustee of a relevant trust has an interest of 50% or more; or - (ii) an interest of 50% or more is held on trust and the trustee of a relevant trust is a beneficiary of that trust. - (a) as if a reference to a body corporate includes a reference to a trustee of a listed unit trust; and - (b) as if section 48 (2) and (3) of that Act did not apply, to the extent the section disregards shares held or a power exercisable only in a fiduciary capacity; and - (c) with any other necessary changes. - (a) a trust interest sale agreement made by the holding entity or a subsidiary of it is taken not to have been made; and - (b) a trust interest purchase agreement made by the holding entity or a subsidiary of it is taken to have been completed.