Insolvency Act 1986, section 435

Meaning of “associate”

Part XVIII Interpretation

(1)For the purposes of this Act any question whether a person is an associate of another person is to be determined in accordance with the following provisions of this section (any provision that a person is an associate of another person being taken to mean that they are associates of each other).

[F1260 (2)A person is an associate of an individual if that person is—

(a)the individual’s husband or wife or civil partner,

(b)a relative of—

(i)the individual, or

(ii)the individual’s husband or wife or civil partner, or

(c)the husband or wife or civil partner of a relative of—

(i)the individual, or

(ii)the individual’s husband or wife or civil partner.F1260]

(3)A person is an associate of any person with whom he is in partnership, and of the husband or wife [F1261or civil partnerF1261] or a relative of any individual with whom he is in partnership; and a Scottish firm is an associate of any person who is a member of the firm.

(4)A person is an associate of any person whom he employs or by whom he is employed.

(5)A person in his capacity as trustee of a trust other than—

(a)a trust arising under any of the second Group of Parts or the Bankruptcy (Scotland) Act [F12622016F1262] , or

(b)F1263a pension scheme or an employees’ share scheme . . . ,

is an associate of another person if the beneficiaries of the trust include, or the terms of the trust confer a power that may be exercised for the benefit of, that other person or an associate of that other person.

(6)A company is an associate of another company—

(a)if the same person has control of both, or a person has control of one and persons who are his associates, or he and persons who are his associates, have control of the other, or

(b)if a group of two or more persons has control of each company, and the groups either consist of the same persons or could be regarded as consisting of the same persons by treating (in one or more cases) a member of either group as replaced by a person of whom he is an associate.

(7)A company is an associate of another person if that person has control of it or if that person and persons who are his associates together have control of it.

(8)For the purposes of this section a person is a relative of an individual if he is that individual’s brother, sister, uncle, aunt, nephew, niece, lineal ancestor or lineal descendant, treating—

(a)any relationship of the half blood as a relationship of the whole blood and the stepchild or adopted child of any person as his child, and

(b)an illegitimate child as the legitimate child of his mother and reputed father;

and references in this section to a husband or wife include a former husband or wife and a reputed husband or wife [F1264and references to a civil partner include a former civil partnerF1264][F1265 and a reputed civil partnerF1265] .

(9)For the purposes of this section any director or other officer of a company is to be treated as employed by that company.

(10)For the purposes of this section a person is to be taken as having control of a company if—

(a)the directors of the company or of another company which has control of it (or any of them) are accustomed to act in accordance with his directions or instructions, or

(b)he is entitled to exercise, or control the exercise of, one third or more of the voting power at any general meeting of the company of or another company which has control of it;

and where two or more persons together satisfy either of the above conditions, they are to be taken as having control of the company.

(11) In this section “company” includes any body corporate (whether incorporated in Great Britain or elsewhere); and references to directors and other officers of a company and to voting power at any general meeting of a company have effect with any necessary modifications.

Definitions used in section 435 1

the company

2 Section 233B does not apply in relation to a contract for the supply of goods or services to a company (“the company”) where any of paragraphs 3 to 11 applies.

Defined in Sch.4ZZA para.2 · see it in the full Act

Cases considering section 435 32

Granada UK Rental & Retail Ltd & Ors v The Pensions Regulator

[2019] EWCA Civ 1032 · 20 June 2019Interprets

A registered holder entitled against the company to exercise at least one-third of its voting power has control, even if another person directs how the votes are cast. Administrative receivers voting in the shareholder’s name do not remove that entitlement. (see paras [126]–[131]) The provision identifies circumstances in which companies are associates through common control. It contributed to the chain of association between the appellants and participating employers. (see paras [96]–[99]) A company is associated with a person who controls it. The concept is intended to have a wide meaning and is not confined to practical control. (see paras [96]; [126]–[131])

Cavendish IP Solutions Limited v On And On Consultants Limited & Anor

[2026] EWHC 2247 (Ch) · 28 August 2026

The court applied s.435(6) to conclude that On And On was itself an associate of the Company because NM controlled it as a shadow director and SM acted on his instructions (see paras [71]-[74]).

Manolete Partners PLC v Norman Freed & Ors

[2024] EWHC 2242 (Ch) · 30 August 2024Defines

The court applied section 435 to determine association and control between the companies and Mr Freed. That analysis established the connected-person status required for the statutory presumptions (see paras [23]-[24]; [57]-[58]). The court applied the statutory definition of control, including entitlement to exercise or control one third or more of the voting power. Mr Freed’s interest and management role supported the finding that he controlled the relevant companies (see paras [24]; [58]). The court used section 435(6) to assess when one company is an associate of another through common control. The evidence established the necessary control relationships (see paras [24]; [57]-[58]). The court applied section 435(7) to the relationship between an individual and a company controlled by that individual or by the individual together with associates (see paras [24]; [57]-[58]).

12 more judgments, and what each says about section 435, are in the case-law panel in the full Act.

Amendments and notes

10 notes from legislation.gov.uk

Amendments

  1. F1260S. 435(2) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 122(2); S.I. 2005/3175, art. 2(2), Sch. 1 (subject to art. 2(3)-(5))
  2. F1261Words in s. 435(3) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 122(3); S.I. 2005/3175, art. 2(2), Sch. 1 (subject to art. 2(3)-(5))
  3. F1262Word in s. 435(5)(a) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 4(10)
  4. F1263Words in s. 435(5)(b) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), arts. 2(1), 8, Sch. 1 para. 82(2) (with art. 10, Sch. 1 para. 84)
  5. F1264Words in s. 435(8) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 122(4); S.I. 2005/3175, art. 2(2), Sch. 1 (subject to art. 2(3)-(5))
  6. F1265Words in s. 435(8) inserted (5.12.2005) by The Civil Partnership Act 2004 (Overseas Relationships and Consequential, etc. Amendments) Order 2005 (S.I. 2005/3129), art. 4(4), Sch. 4 para. 8

Modifications

  1. C1312S. 435 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II
  2. C1313S. 435: power to apply (with modifications) conferred (6.4.2005) by Pensions Act 2004 (c. 35), ss. 57, 322(1) (with s. 313); S.I. 2005/275, art. 2(7), Sch. Pt. 3 (subject to art. 2(12))
  3. C1314S. 435 applied (31.5.2021 for specified purposes) by 2004 c. 35, s. 69A(14)(b) (as inserted by Pension Schemes Act 2021 (c. 1), ss. 109(2), 131(1); S.I. 2021/620, reg. 2(1)(b))
  4. C1315S. 435 modified (15.7.2026) by Steel Industry (Nationalisation) Act 2026 (c. 27), ss. 32(3), 63(1)