Close companies: loans to participators: material interest
A person can have a material interest through control of share capital or entitlement to a portion of the company’s assets on its winding up.
A person has a material interest in a company if he, either on his own or with one or more associates, or if any associate of his with or without any such associates -
- is/are the beneficial owner(s) of, or able directly or through the medium of other companies or by any other indirect means to control, more than 5% of the ordinary share capital.
Ordinary share capital means all the issued share capital, however described, of the company, other than share capital carrying a right to a dividend only at a fixed rate and no other right to share in the company’s profits.
- possesses, or is entitled to acquire, such rights that would in the event of the winding up of the company or any other circumstances, give an entitlement to receive more than 5% of the assets which would then be available for distribution among the participators.