Companies Act 2006, section 1159

Meaning of “subsidiary” etc

Part 38 Companies: interpretation

(1) A company is a “subsidiary” of another company, its “holding company”, if that other company—

(a)holds a majority of the voting rights in it, or

(b)is a member of it and has the right to appoint or remove a majority of its board of directors, or

(c)is a member of it and controls alone, pursuant to an agreement with other members, a majority of the voting rights in it,

or if it is a subsidiary of a company that is itself a subsidiary of that other company.

(2) A company is a “wholly-owned subsidiary” of another company if it has no members except that other and that other's wholly-owned subsidiaries or persons acting on behalf of that other or its wholly-owned subsidiaries.

(3)Schedule 6 contains provisions explaining expressions used in this section and otherwise supplementing this section.

(4) In this section and that Schedule “company” includes any body corporate.

Read section 1159 in the full Act → Definitions (6) Cases (16)

Definitions used in section 1159

company

“company” means a company formed and registered under this Act, that is—

(a)

a company so formed and registered after the commencement of this Part, or

(b)

a company that immediately before the commencement of this Part—

(i)

was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii)

was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

Defined in s.1(1) · see it in the full Act
member

(2) In sub-paragraph (1) “member” has the same meaning as it has by virtue of section 7(1) of that Act .

Defined in Sch.2 Pt.1 · see it in the full Act
director

In the Companies Acts “director” includes any person occupying the position of director, by whatever name called.

Defined in s.250 · see it in the full Act
subsidiary

(1) The Secretary of State may by regulations amend the provisions of section 1159 (meaning of “subsidiary” etc) and Schedule 6 (meaning of “subsidiary” etc: supplementary provisions) so as to alter the meaning of the expressions “subsidiary”, “holding company” or “wholly-owned subsidiary”.

Defined in s.1160(1) · see it in the full Act

(1) The Secretary of State may by regulations amend the provisions of section 1159 (meaning of “subsidiary” etc) and Schedule 6 (meaning of “subsidiary” etc: supplementary provisions) so as to alter the meaning of the expressions “subsidiary”, “holding company” or “wholly-owned subsidiary”.

Defined in s.1160(1) · see it in the full Act

(1) The Secretary of State may by regulations amend the provisions of section 1159 (meaning of “subsidiary” etc) and Schedule 6 (meaning of “subsidiary” etc: supplementary provisions) so as to alter the meaning of the expressions “subsidiary”, “holding company” or “wholly-owned subsidiary”.

Defined in s.1160(1) · see it in the full Act

1 The provisions of this Part of this Schedule explain expressions used in section 1159 (meaning of “subsidiary” etc) and otherwise supplement that section.

Defined in Sch.6 para.1 · see it in the full Act
wholly-owned subsidiary

(1) The Secretary of State may by regulations amend the provisions of section 1159 (meaning of “subsidiary” etc) and Schedule 6 (meaning of “subsidiary” etc: supplementary provisions) so as to alter the meaning of the expressions “subsidiary”, “holding company” or “wholly-owned subsidiary”.

Defined in s.1160(1) · see it in the full Act
body corporate

“body corporate” and “corporation” include a body incorporated outside the United Kingdom, but do not include—

(a)

a corporation sole, or

(b)

a partnership that, whether or not a legal person, is not regarded as a body corporate under the law by which it is governed;

Defined in s.1173(1) · see it in the full Act

Cases considering section 1159 (16)

Macdonald Hotels Limited & Anor v Bank of Scotland PLC

[2025] EWHC 32 (Comm) · 24 January 2025

Defines when one company is a subsidiary of another for the facility agreement. The subsidiary ceased to fall within that definition when its shares were transferred, but it remained an Original Borrower because the contractual resignation machinery had not been used (see paras [226]-[229]).

Alphier Capital LLP v Blyvoor Gold Capital (Pty) Ltd

[2024] EWHC 2649 (Ch) · 21 October 2024Defines

Defines the relevant relationship between holding companies and subsidiaries by reference to voting rights, board-appointment rights and control agreements. The court used the definition to conclude that Tellimer was a sister company, not a member of Exotix’s contractually defined Group.

Buckinghamshire Council v FCC Buckinghamshire Limited

[2024] EWHC 1552 (TCC) · 21 June 2024Defines

The judgment applies the statutory meaning of “holding company” and “subsidiary” in defining Affiliates under the project agreement. FCC Recycling (UK) Limited therefore fell within the contractual definition of Affiliate, although that did not make every reference to the Contractor extend to it. (see paras [373]-[389])

What each judgment says about section 1159 is in the case-law panel in the full Act.

Amendments and notes

2 notes from legislation.gov.uk

Modifications

  1. C1784S. 1159 applied by Enterprise Act 2002 (c. 40), s. 79(9) (as amended (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), art. 2(1), Sch. 1 para. 199(2)(a) (with art. 10))

Commencement

  1. I422S. 1159 wholly in force at 1.10.2009; s. 1159 not in force at Royal Assent see s. 1300; s. 1159 in force for certain purposes at 6.4.2008 by S.I. 2007/3495, art. 3(4) (with savings in arts. 7, 12); s. 1159 otherwise in force at 1.10.2009 by S.I. 2008/2860, art. 3(u) (with arts. 5, 7, 8, Sch. 2) (as amended by S.I. 2009/1802, art. 18) this amendment is subject to savings and/or transitional provisions, see the commentary.