If two relatives have 25% each of the shares in the BES company and they also hold 60% and 20% respectively in a company carrying on a similar trade, would this offend the provisions of this rule? No. As “associate” for the purposes of Section 495(11) excludes relatives, no individual has control. 1300/91
Would a sound recording company controlled by individuals who had control of other sound recording companies breach this section? No – it is necessary for the purposes of the law to set up a separate company and this is acceptable provided that there is no attempt to breach Section 491.
Would companies serving different markets although the same industry, offend this section? No. If there was a good commercial reason for establishing the second company and if there would be no transfer of business from one to the other or winding down of one business. 6432/5/98
Where part of a trade is transferred from an existing company to a new company, can the original company retain control of the second company until a BES investment is made? No 3584/97B
A qualifying company can only have qualifying subsidiaries. Would the existence of non-qualifying subsidiaries, which are now dormant, disqualify the company? No, provided the subsidiaries remained dormant. 8085/84
If Udaras na Gaeltachta owns a majority of the shares in the company, mainly for the purpose of injecting capital into the company, would this offend this rule? No. Udaras shares are akin to a loan. 860/87A
Where it is not technically possible to organise a BES scheme because a company is a member of a group, would a hive-down of certain activities be allowed? Yes, provided the Revenue Commissioners are satisfied that the hive-down is necessary because of technical difficulties with the BES and for no other reason and the company is a stand alone company after the BES share issue, and also provided there is no attempt to breach Section 491. File not available – issue included for completion of data base.
(1) Whether non-trading activities or income which arises as an incidental to the carrying on of the trade e.g. interest on cash flow, rents from letting part of the conpany's trading premises etc..., or (2) Whether incidental shareholdings in other companies, be they subsidiaries, suppliers, or customers; would be regarded as diluting the companies 100% existence for trading purposes. or (3) Whether the holding of lands and buildings by a holding company, which are used by its subsidiary companies, would be regarded as affecting the “wholly” provision of this section? (1) No; (2) No, provided such holdings are part of the natural trading environment in which the company operates and provided the holdings are for the purposes related to the trade. (3) No, so long as the holding company retains ownership and the land and buildings were used by the subsidiary companies throughout the relevant period. 991/87
Would a company carrying on a qualifying trade in partnership be precluded per se from being considered to be a qualifying company? No, provided that the company carrying on a trade in partnership invests the monies raised in itself, then that company can be regarded as a qualifying company (provided the other conditions are met). If however, the BES monies raised are used to invest in a partnership trade then the company would not qualify. i.e. the BES money must be used for the BES company's trade. 322/92
Fully paid up share capital
Can assets be used as payment of shares? Yes, provided there is no transfer of trade. However, no BES relief is due (see Section 489 I (b) TCA 1997). 4455/88