Common control
If the same person or a group of people has a controlling interest in 2 or more businesses, those businesses are grouped.
What is a controlling interest?
An interest of more than 50% is a controlling interest. A controlling interest can be held by 1 person or a group of people if no individual has control of the business. A 'person' means a natural person, trustee or corporate entity.
A controlling interest under the grouping provisions includes:
Sole owner
One person is the sole business owner (whether or not as trustee).
Joint owners
A set of persons, together as trustees, are the sole business owners.
Company
A person or set of persons are entitled to exercise more than 50% of the voting power:
at director meetings or
attached to voting shares that the company has issued.
Body corporate or unincorporate
A person or set of persons constitute or control more than 50% of the board of management.
Partnership
A person or set of persons:
own more than 50% of the capital or
are entitled to more than 50% of the profits.
Trust
A person or set of persons are a beneficiary of more than 50% of the value of the trust that carries on the business.
Under a discretionary trust, all beneficiaries are deemed to have a controlling interest.
Examples of groups arising from common control
Mr Able and Ms Bravo are the majority shareholders of Ginger Pty Ltd and Cloves Pty Ltd. As both businesses are commonly controlled, they are grouped.
Mr Red and Ms Green are the only directors of Kilo Pty Ltd. Mr Red and Ms Green are both beneficiaries of the Blue discretionary trust. As Kilo Pty Ltd and the Blue discretionary trust are commonly controlled, they are grouped.
Exclusion provisions: Under this provision a business may apply for an exclusion from the group.
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