ETASSUM47130 - Schedule 4 Company Share Option Plan (CSOP): Supplementary and defined terms: Jointly owned companies
For the purposes of paragraph 34 a jointly owned company (JOC) is one that is not controlled by any one person and 50% of the issued share capital is owned by one person and 50% by another, or it is otherwise controlled by two persons taken together. Paragraph 34 allows for the Schedule 4 CSOP code relating to group schemes (see ETASSUM47120) to be extended to include JOCs and any company controlled by that JOC. The conditions for this are that no JOC or any company controlled by that company may be a constituent company in more than one Schedule 4 CSOP group scheme nor may the JOC (or one of its subsidiaries) be a constituent company of a Schedule 4 CSOP group scheme if one of those companies (the jointly-owned company and its subsidiaries) is a constituent company of another Schedule 4 CSOP group scheme.
For the purposes of determining 'control' each joint owner of a JOC is regarded as controlling every JOC and any company controlled by that company.
For example:
- both Company A and Company B each own 50% of the issued share capital of Company C
- Company C owns 100% of the issued share capital of Company X, Company Y and Company Z
- both Company A and Company B have Schedule 4 CSOP schemes with provisions allowing for participation of jointly-owned companies
- if employees of Company C are granted Schedule 4 CSOP options by Company A, then only Company A could grant further options to employees of Company C or any of its subsidiary companies
- if Company B had previously granted options to
employees of Company C or any of its subsidiary companies then Company A would
be prevented from granting options to employees of any of those companies
For a visual representation of this refer to the jointly-owned company example diagram.