CORPORATIONS ACT 2001

CHAPTER 1 - INTRODUCTORY  

PART 1.2 - INTERPRETATION  

Division 6 - Subsidiaries and related bodies corporate  

SECTION 50AA   CONTROL  

50AA(1)   [ Definition of control]  

For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

50AA(2)   [ Definition of capacity]  

In determining whether the first entity has this capacity:


(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and


(b) any practice or pattern of behaviour affecting the second entity's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

50AA(3)   [ Joint capacity]  

The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

50AA(4)   [ Legal obligation to control]  

If the first entity:


(a) has the capacity to influence decisions about the second entity's financial and operating policies; and


(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity's members;

the first entity is taken not to control the second entity.


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