6. When corporations deemed to be related to each other

Question 1

6. When corporations deemed to be related to each other

Answer 1

General overview
[6.01] This section contains the statutory definition of related companies, which essentially means the holding-subsidiary relationship. The common usage of the term “associated companies” by accountants where one company holds 25% of the total issued shares of another company is not found in the Act, and associated companies are not related companies.

Question 2

Related companies

Answer 2

[6.02] Some examples:

(a) X is the holding company of Y, then X and Y are related companies.
(b) X is the subsidiary of Y, then X and Y are related companies.
(c) X and Y share the same holding company, then X and Y are related companies.