150.
| (1) For the purposes of this Act, a company shall, subject to the provisions of subsection (3), be deemed to be a subsidiary of another if, and only if -
| | (a) that other company either
| | | (i) is a member of it and controls the composition of its board of directors; or |
| (ii) holds more than half in nominal value of its equity share capital; or |
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| | (b) the first-mentioned company is a subsidiary of any company which is that other company's subsidiary. | | |
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| (2) For the purposes of subsection (1), the composition of a company's board of directors shall be deemed to be controlled by another company if, and only if, that other company by the exercise of any power excisable by it without the consent or concurrence of any ether person can appoint or remove the holders of all or a majority of the directorships ; but for the purposes of these provisions that other company shall be deemed to have power to appoint to a directorship with respect to which any of the following conditions is satisfied, that is to say-
| | (a) that a person cannot be appointed to a directorship without the exercise in his favour by that other company of a power to so appoint; or | | |
| | (b) that a person's appointment to a directorship follows necessarily from his appointment as director of that other company ; or | | |
| | (c) that the directorship is held by that other company itself or by a subsidiary of it. | | |
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| (3) In determining whether one company is a subsidiary of another-
| | (a) any shares held or power excisable by that other in a fiduciary capacity shall be treated as not held or excisable by it; | | |
| | (b) subject to the provisions of paragraphs (c) and (d), any shares held or power excisable
| | | (i) by any person as a nominee for that other (except where that other is concerned only in a fiduciary capacity) ; or |
| (ii) by, or by a nominee for, a subsidiary of that other, not being a subsidiary which is concerned only in a fiduciary capacity, |
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| | (c) any shares held or power exercisable by any person by virtue of the provisions of any debentures of the first-mentioned company or of a trust deed for securing any issue of such debentures shall be disregarded; | | |
| | (d) any shares held or power exercisable by, or by a nominee for, that other or its subsidiary (not being held or exercisable as referred to in paragraph (c)) shall be treated as not held or exercisable by that other if the ordinary business of that other or its subsidiary, as the case may be, includes the lending of money and the shares are held or power is exercisable as aforesaid by way of security only for the purposes of a transaction entered into in the ordinary course of that business. | | |
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| (4) For the purposes of this Act, a company shall be deemed to be another's holding company if, and only if, that other is its subsidiary. |
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| (5) In this section, the expression " company" includes any body corporate, and the expression " equity share capital " in relation to a company means its issued share capital excluding any part thereof which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution . |
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Sri Lanka Consolidated Acts