Commentary

D2.108 Definition of a group—ordinary share capital

Corporate tax
Corporate tax | Commentary

D2.108 Definition of a group—ordinary share capital

Corporate tax | Commentary

D2.108 Definition of a group—ordinary share capital

In most cases, the definition of group is based on the holding of ordinary share capital.

The concept of what is ordinary share capital can be particularly complex, especially in cases where a company does not have authorised share capital or where the group company being considered is a non-UK entity. These are considered in further detail below.

Ordinary share capital is defined as all the 'issued share capital' of the company (by whatever name called) except capital giving the holder a right to a dividend at a fixed rate and to no other right to share in the profits of the company1.

The rights in relation to the issued share capital are typically those created by the articles of association as altered from time to time or as varied by agreement.

This definition of share capital is very wide and includes:

  1.  

    (a)     shares that provide any other right to share in the profits (that is income and chargeable gains) of the company in addition to the fixed rate, regardless of the likelihood of such a right being

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