Companies Act 2014 section 1192

Application of section 114 in relation to CLGs

Section 1192 adapts the rules in section 114 (which restricts a subsidiary from holding shares in its holding company) so that they apply properly to companies limited by guarantee (CLGs), where membership does not depend on holding shares.

• Section 114 restricts a subsidiary from acquiring and holding shares in its holding company.
• CLGs have members who do not hold shares, so the concept of "acquiring and holding shares" does not directly apply.
• Section 1192 extends section 114 so that references to acquiring and holding shares also cover becoming and remaining a member of a CLG.
• This ensures the subsidiary restriction applies equally to CLGs, preventing a subsidiary from becoming or continuing as a member of its holding company where that company is a CLG.