(Since a change in the law effective 1 July 2003, you cannot incorporate a company without disclosing whether or not the company to be incorporated will initially have an 'ultimate holding company' - per section 117(2)(ma) of the Corporations Act 2001, and if it will, without disclosing the identity of that ultimate holding company - per section 117(2)(mb) of the Corporations Act 2001.) Loosely speaking, what this question is 'getting at' is to ascertain whether the company you proposing to form - "the proposed company" - will initially, in effect, be owned by another company, or will be legally, or in effect, or practically, controlled by another company. Normally, the answer to this question will be 'No'. For example, in the normal situation where the member(s)/shareholder(s) of the proposed company will be human being(s) and who will be simply holding the shares for their own benefit, then it is most unlikely that the proposed company will have an ultimate holding company, and thus the answer to this question will most likely be 'No'. An obvious example of a situation where the answer to this question will most likely be 'Yes' is where the proposed company will have all of its shares owned by another company, and that other company has all of its shares owned by human beings who are simply holding the shares for their own benefit. In this situation the 'other' company is highly likely to be the 'ultimate holding company' of the proposed company. A less obvious example of a situation where the answer to this question will most likely be 'Yes' is where even though the proposed company will have all of its shares owned by a human being, the human being will be acting as the nominee of another company acting solely for its own benefit. In this situation the 'other' company will most likely be the 'ultimate holding company' of the proposed company. A less obvious example of a situation where the answer to this question will most likely be 'No' is where even though the proposed company will have all of its shares owned by another company, the other company is holding the shares on trust for a human being acting solely for his or her own benefit. In this situation the 'other' company will most likely not be the 'ultimate holding company' of the proposed company. Here is some further guidance in case you need to look into your particular situation more deeply - An 'ultimate holding company' of a company, is a company that is itself a 'holding company' of the company, and is itself not a 'subsidiary' of another company - see section 9 of the Corporations Act 2001. A company is a 'holding company' of another company, if the other company is a 'subsidiary' of the company - see section 9 of the Corporations Act 2001. A company is a 'subsidiary' of another company, if (and only if) at least one of the following is the case - the other company 'controls the composition of the company's board'; the other company is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the company; the other company holds more than one-half of the issued share capital of the company (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); the company is a subsidiary of a subsidiary of the other company by virtue of (any or all of) (a), (b) or (c) above or any of the provisions of Division 6 of the Corporations Act 2001. (See sections 9, 46 and 49 of the Corporations Act 2001.) For when it may be said that the other company 'controls the composition of the company's board', see section 47 of the Corporations Act 2001. Further, various matters are to be disregarded when determining whether the company is a subsidiary of another company - see section 48 of the Corporations Act 2001. Moreover, here are links (grouped together) to the provisions of the relevant division (Division 6) of the Corporations Act 2001 in case you need to look into your particular situation even more deeply -   Division 6 - Subsidiaries and related bodies corporate     46.      What is a subsidiary     47.      Control of a body corporate's board     48.      Matters to be disregarded     49.      References in this Division to a subsidiary     50.      Related bodies corporate     50AA.  Control

Incorporator.com.au   Copyright © 2000