24.3 THE MEANING OF CONTROL OF A JURISTIC PERSON
The word control is capable of numerous meanings. The words ‘control of a company’ is defined in s 2 (2) (a)
For the purposes of s 2(1) a person (first person) controls a company or its business;
1. if that company is a subsidiary of the first person as determined in terms of s 3(1)(a). This means the subsidiary by definition is always related to its holding company and vice versa.
2. The first person together with any related or inter-related person is directly or indirectly able to exercise or control the majority of the voting rights associated with securities of that company whether pursuant to a shareholder agreement or otherwise or
Has the right to appoint or elect or control the appointment or election of directors of that company who controls a majority of the votes at a board meeting.
Control at board level is something that is tested by the majority of the votes that the directors control. There is a common law duty that whichever way director’s vote they must carry out their fiduciary duty which is a common law principle. A Close Corporation and Trust are included in these definitions and it is just a question of control.
S 2(2)(d) is a catch all and takes the meaning of control even further.