D3.103 Definition of a close company—meaning of control, participator, associate, director
As detailed at D3.102, the definition of a close company hinges on several key concepts – namely control, participator, associate and director – all of which are discussed below.
Control for close company purposes
For the purpose of the close company legislation, a person is treated as having control of a company1 if he exercises, or is able to exercise or is entitled to acquire, direct or indirect control over the company's affairs. A person is treated as being entitled to acquire anything which he is entitled to acquire at a future date or will at a future date be entitled to acquire2.
In particular, a person, or two or more persons have control if he/they possesses, or are entitled to acquire:
• the greater part of the share capital or issued share capital of the company
• the greater part of the voting power in the company
• so much of the issued share capital of the company as would entitle him, on the assumption that the whole of the income of the company were distributed among the participators, to receive the greater part of the amount so distributed — this notional distribution ignores any rights which he or any other person has as a loan creditor, or
• such rights as would, in the event of the winding up of the company or in any other circumstances, entitle him to receive the greater part of the assets then
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