Control
The word "control" used in the definition of "subsidiary" is generally taken to include both practical and theoretical control. Thus, reference to a body which "controls the composition" of another body's board is a reference to control in principle, while reference to being able to cast more than half of the votes at a general meeting, whether legally enforceable or not, refers to theoretical power. The fact that a company has a holding of less than 50% plus one share which, because the holdings of others are widely dispersed, gives effective control is not enough to give that company 'control' for the purpose of determining whether it is a subsidiary.
In Australia, for instance, the accounting standards defined the circumstances in which one entity controls another. In doing so, they largely abandoned the legal control concepts in favour of a definition that provides that 'control' is "the capacity of an entity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of another entity so as to enable that other entity to operate with it in pursuing the objectives of the controlling entity." This definition was adapted in the Australian Corporations Act 2001: s 50AA. And also it can be a very useful part of the company that allows every head of the company to apply new projects and latest rules.
Read more about this topic: Subsidiary
Famous quotes containing the word control:
“I candidly confess that I have ever looked on Cuba as the most interesting addition which could ever be made to our system of States. The control which, with Florida, this island would give us over the Gulf of Mexico, and the countries and isthmus bordering on it, as well as all those whose waters flow into it, would fill up the measure of our political well-being.”
—Thomas Jefferson (1743–1826)
“Grown-up people do very little and say a great deal.... Toddlers say very little and do a great deal.... With a toddler you cannot explain, you have to show. You cannot send, you have to take. You cannot control with words, you have to use your body.”
—Penelope Leach (20th century)
“Being a parent is such serious business that we dare not take it too seriously. Children are inherently funny. So are parents. We all are at our funniest when we are desperately struggling to appear to be in control of a new situation.”
—Lawrence Kutner (20th century)