Corporation Tax Act, 1976
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PART X Close Companies | ||
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Meaning of close company. |
94.—(1) For the purposes of this Act, a “close company” is one which is under the control of five or fewer participators, or of participators who are directors, except that the expression does not apply— | |
(a) to a company not resident in the State, or | ||
(b) to a registered industrial and provident society within the meaning of section 30 (industrial and provident societies), or to a building society within the meaning of section 31 (building societies), or | ||
(c) to a company controlled by or on behalf of the State, and not otherwise a close company, or | ||
(d) to a company falling within subsection (4) or section 95. | ||
(2) For the purposes of this section— | ||
(a) a company is to be treated as controlled by or on behalf of the State if, but only if, it is under the control of the State or of persons acting on behalf of the State, independently of any other person, and | ||
(b) where a company is so controlled, it shall not be treated as being otherwise a close company unless it can be treated as a close company as being under the control of persons acting independently of the State. | ||
(3) A company resident in the State (but not falling within subsection (1) (b)) is also a close company if, on a full distribution of its distributable income, more than half of it would fall to be paid, directly or indirectly, to five or fewer participators, or to participators who are directors. | ||
(4) A company is not to be treated as a close company— | ||
(a) if— | ||
(i) it is controlled by a company which is not a close company, or by two or more companies none of which is a close company, and | ||
(ii) it cannot be treated as a close company except by taking as one of the five or fewer participators requisite for its being so treated a company which is not a close company; | ||
(b) if it cannot be treated as a close company except by virtue of paragraph (c) of section 102 (2) and it would not be a close company if the reference in that paragraph to participators did not include loan creditors who are companies other than close companies. | ||
(5) References in subsection (4) to a close company shall be treated as applying to any company which, if resident in the State, would be a close company. | ||
(6) If shares in any company (in this subsection referred to as the “first company”) are at any time after the 5th day of April, 1976, held on trust for a fund or scheme approved under section 222 or 229 of the Income Tax Act, 1967 , or for an exempt approved scheme as defined in Chapter II of Part I of the Finance Act, 1972 , then, unless the fund or scheme is established wholly or mainly for the benefit of persons who are, or are dependants of, employees or directors or past employees or directors of— | ||
(a) the first company; or | ||
(b) an associated company of the first company; or | ||
(c) a company which is under the control of any director or associate of a director of the first company or of two or more persons each of whom is such a director or associate; or | ||
(d) a close company; | ||
the persons holding the shares shall, for the purposes of subsection (4), be deemed to be the beneficial owners of the shares and, in that capacity, to be a company which is not a close company. |