EM1512 - Opening the Enquiry: Statute: CTSA Time Limits - Identify the whole group before considering whether it is small
Before you consider whether a company is a member of a group that is not small, for the purpose of the time limits for opening enquiries, see EM1510, it is important to identify the whole group. This 鈥榳hole group鈥� view is necessary even if the ultimate parent company or an intermediate parent company is overseas.
This is because the Companies Act defines a group as 鈥榓 parent undertaking and its subsidiary undertakings鈥� and says that a 鈥榗ompany is a subsidiary of another company鈥f it is a subsidiary of a company that is itself a subsidiary of that other company.鈥�
The effect of those definitions is that an individual company that is a member of the complex group structure could be a member of a number of 鈥榞roups鈥� within it. If the ultimate parent鈥檚 group is not small it does not matter whether the company is a member of a 鈥榮mall鈥� sub-group within that complex group structure. The company is still a member of a group that is not small.
Example
Company A owns two other companies, B and C. Company B owns companies D and E while company C owns companies F and G.
There is a sub-group made up of companies B, D and E. There is another sub-group made up of companies C, F and G.
However, the group to identify, before considering whether it is small, is the widest possible group. In this case, therefore, all of the companies A - G are in the group to be considered and not just, for instance, B, D and E.
Once you have identified the whole group, you can consider the conditions to be satisfied for it to be a small group, see EM1513.