Associated Entities - Corporations Act

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24 January 2020
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Hello.

I am trying to determine whether Company A and Company B are 'associated entities' as per s50AAA of the Corporations Act. Each company owns a business with different ABNs.

Both companies have two shareholders with 50% shares each. The shareholders are a husband & wife.

The husband is the Director of Company A and the wife is the Director of Company B.

The husband/wife are equally involved in the day-to-day operation/running of both companies and the making of decisions about the businesses owned by each company. Employees do work for both companies interchangeably.

Could Company A and Company B be considered to be associated in this situation?
 

Rob Legat - SBPL

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This may be a situation where there is control pursuant to section 50AA - CORPORATIONS ACT 2001 - SECT 50AA Control.

This section is more inclusive than the basic relationship requirements under 50AAA, but is a harder section to prove. It's also very situational.

Provided you can establish control under 50AA, you can potentially invoke subsection 50AAA(7) which would render them associated.