Companies Act 2014 section 983

Application of section 114 in relation to DACs

Section 983 extends the rules in section 114 (which govern when a subsidiary may hold shares in its holding company) so that they also cover membership of a DAC limited by guarantee, where membership is not based on holding shares.

• Section 114 sets out the rules about a subsidiary acquiring and holding shares in its holding company.
• Where the holding company is a DAC limited by guarantee, members may belong to the company without holding any shares.
• Section 983 ensures that references in section 114 to acquiring and holding shares also cover becoming and being a member of a guarantee company by other means.
• This prevents the subsidiary-holding-company restrictions in section 114 from being bypassed simply because the holding company is a guarantee company without a share-based membership structure.