Finance Act, 1986
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Qualifying research and development company. |
21.—(1) A company (hereafter in this section and in section 23 referred to as a “research and development company”) is a qualifying research and development company if it is incorporated in the State and complies with the requirements of this section and of section 23 . | |
(2) The research and development company shall, throughout the relevant period— | ||
(a) be resident in the State and not resident elsewhere, and | ||
(b) exist solely for the carrying out of a qualifying research and development project. | ||
(3) Without prejudice to the generality of subsection (2) but subject to subsection (4), a research and development company ceases to comply with subsection (2) if before the end of the relevant period a resolution is passed, or an order is made, for the winding up of the company (or, in the case of a winding up otherwise than under the Companies Act, 1963 , any other act is done for the like purpose) or the company is dissolved without winding up. | ||
(4) A research and development company shall not be regarded as ceasing to comply with subsection (2) if it does so by reason of being wound up or dissolved without winding up and it is shown that the winding up or dissolution was for bona fide commercial reasons and not part of a scheme or arrangement the main purpose or one of the main purposes of which was the avoidance of tax. | ||
(5) The research and development company's issued share capital may not, at any time in the relevant period, include any shares which are not eligible shares. | ||
(6) (a) The research and development company may not at any time in the relevant period— | ||
(i) control (or together with any person connected with it control) another company or be under the control of another company (or of another company and any person connected with that other company), or | ||
(ii) be a 51 per cent. subsidiary of another company or itself have a 51 per cent. subsidiary, | ||
and no arrangements may be in existence at any time in that period by virtue of which the company could fall within subparagraph (i) or (ii). | ||
(b) In this subsection “51 per cent. subsidiary”, in relation to any company, has the meaning assigned to it, for the purposes of the Corporation Tax Acts, by section 156 of the Corporation Tax Act, 1976 . | ||
(7) Any qualifying sponsoring company in respect of which the research and development company carries out a qualifying research and development project may not in the relevant period, directly or indirectly, possess or be entitled to acquire more than 49 per cent. of— | ||
(a) the issued ordinary share capital of the research and development company, or | ||
(b) the loan capital and issued share capital of the research and development company, or | ||
(c) the voting power in the research and development company. | ||
(8) Where at any time a research and development company is or may become entitled to receive any amount by reason of its having carried out a qualifying research and development project it shall, at that time, be treated as existing for the carrying out of that project. |