subsidiary undertaking

subsidiary undertaking
For accounting purposes, a company is required to prepare consolidated accounts for itself and every undertaking (including an unincorporated association) which is its "subsidiary undertaking". Parent and subsidiary undertakings are defined in section 258 of the Companies Act 1985. Broadly, an undertaking is a parent undertaking in relation to a subsidiary undertaking if:
• It holds a majority of the voting rights in it; or
• It is a member of it and has the right to appoint or remove a majority of its board; or
• It has the right to exercise dominant influence over it by virtue of provisions contained in the subsidiary undertaking's memorandum of association or articles of association or a control contract; or
• It is a member of it and controls a majority of its voting rights; or
• It has a participating interest in it and actually exercises a dominant influence over it or both of them are managed on a unified basis.
Related links

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

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  • subsidiary undertaking — group undertaking An undertaking that is controlled by another undertaking (the parent or holding company). The extent of the control needed to define a subsidiary is given in the Companies Act (1985). The financial statements of a subsidiary… …   Big dictionary of business and management

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  • unconsolidated subsidiary — An undertaking that, although it is a subsidiary undertaking of a group, is not included in the consolidated financial statements of the group. See: exclusion of subsidiaries from consolidation …   Accounting dictionary

  • unconsolidated subsidiary — An undertaking that, although it is a subsidiary undertaking of a group, is not included in the consolidated financial statements of the group …   Big dictionary of business and management

  • quasi-subsidiary — A company, trust, partnership, or other arrangement that does not fulfil the definition of a subsidiary undertaking but is directly or indirectly controlled by the reporting entity and gives rise to benefits for that entity that are in substance… …   Accounting dictionary

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  • controlled undertaking — Any subsidiary undertaking within the meaning of the Financial Services and Markets Act 2000 (FSMA), other than section 258(4)(b) of the Companies Act 1985 or section 420(2)(b) of FSMA. Practical Law Dictionary. Glossary of UK, US and… …   Law dictionary

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