Definition of a subsidiary re audit exemption

paulpd

Hi,

From the information below, would the following company be exempt from audit? I know any Irish subsidiary company needs to be audited though. The shares in the Irish company are split as follows :


80%- german resident individual

20%- uk resident ltd company

Thanks a lot

Alan Shore

My understanding is that unless a company controls more than 50% of the shares in the subsidiary then it is not a subsidiary for the purposes of the act.

From EUROPEAN COMMUNITIES (COMPANIES: GROUP ACCOUNTS) Regulations, 1992.

Subsidiary undertaking.
4. (1) For the purposes of these Regulations, an undertaking shall be deemed to be a subsidiary of another, if but only if—

( a ) that other—
(i) holds a majority of the shareholders' or members' voting rights in the undertaking, or
(ii) is a shareholder or member of it and controls the composition of its board of directors, or
(iii) is a shareholder or member of it and controls alone, pursuant to an agreement with other shareholders or members, a majority of the shareholders' or members' voting rights; or
( b ) that other has the right to exercise a dominant influence over it—
(i) by virtue of provisions contained in its memorandum or articles, or
(ii) by virtue of a control contract; or
( c ) that other has a participating interest in it and—
(i) that other actually exercises a dominant influence over it, or
(ii) that other and the subsidiary undertaking are managed on a unified basis; or
( d ) the undertaking is a subsidiary of any undertaking which is that other's subsidiary undertaking.

paulpd

Thanks a lot for that.