COMPANIES BILL - Department of Trade and Industry

18(a) in the case of a juristic person that is a company—(i) that juristic person is a subsidiary of that first person, as determined inaccordance with section 3(1)(a); or(ii) that first person together with any related or inter-related person, is—(aa) directly or indirectly able to exercise or control the exercise of amajority of the voting rights associated with securities of thatcompany, whether pursuant to a shareholder agreement or otherwise;or(bb) has the right to appoint or elect, or control the appointment orelection of, directors of that company who control a majority of thevotes at a meeting of the board;(b) in the case of a juristic person that is a close corporation, that first person ownsthe majority of the members’ interest, or controls directly, or has the right tocontrol, the majority of members’ votes in the close corporation;(c) in the case of a juristic person that is a trust, that first person has the ability tocontrol the majority of the votes of the trustees or to appoint the majority ofthe trustees, or to appoint or change the majority of the beneficiaries of thetrust; or(d) that first person has the ability to materially influence the policy of the juristicperson in a manner comparable to a person who, in ordinary commercialpractice, would be able to exercise an element of control referred to inparagraph (a), (b) or (c).(3) With respect to any particular matter arising in terms of this Act, a court, theCompanies Ombud or the Panel may exempt any person from the application of aprovision of this Act that would apply to that person because of a relationshipcontemplated in subsection (1) if the person can show that, in respect of that particularmatter, there is sufficient evidence to conclude that the person acts independently of anyrelated or inter-related person.510152025Subsidiary relationships3. (1) A company is—30(a) a subsidiary of another juristic person if that juristic person, one or more othersubsidiaries of that juristic person, or one or more nominees of that juristicperson or any of its subsidiaries, alone or in any combination—(i) is or are directly or indirectly able to exercise, or control the exercise of,a majority of the general voting rights associated with issued securities of 35that company, whether pursuant to a shareholder agreement or otherwise;or(ii) has or have the right to appoint or elect, or control the appointment orelection of, directors of that company who control a majority of the votesat a meeting of the board; or40(b) a wholly-owned subsidiary of another juristic person if all of the generalvoting rights associated with issued securities of the company are held orcontrolled, alone or in any combination, by persons contemplated inparagraph (a).(2) For the purpose of determining whether a person controls all or a majority of the 45general voting rights associated with issued securities of a company—(a) voting rights that are exercisable only in certain circumstances are to be takeninto account only—(i) when those circumstances have arisen, and for so long as they continue;or50(ii) when those circumstances are under the control of the person holding thevoting rights;(b) voting rights that are exercisable only on the instructions or with the consentor concurrence of another person are to be treated as being held by a nomineefor that other person; and55(c) voting rights held by—(i) a person as nominee for another person are to be treated as held by thatother person; or(ii) a person in a fiduciary capacity are to be treated as held by the beneficiaryof those voting rights.60(3) For the purposes of subsection (2), ‘hold’, or any derivative of it, refers to theregistered or direct or indirect beneficial holder of securities conferring a right to vote.