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Deposit Takers Act 2023

Preliminary provisions

7: Meaning of associated person and holding entity

You could also call this:

"What it means to be connected to someone else in business or to own another business"

Illustration for Deposit Takers Act 2023

When you are reading this Act, you need to know what it means for a person to be associated with another person. You are associated with another person if they own or control you, or if you own or control them. This can happen in several ways, such as if one person owns more than half of the voting shares of the other person.

If more than half of the voting shares of two people are owned by each other, then they are associated. You are also associated with another person if your businesses are so mixed up that it is hard to tell them apart. Another way you can be associated is if you both have a connection to a third person.

If someone is your associate, that means you are associated with them. A holding entity is a person that has a subsidiary, which means they own or control another person.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS492650.

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Part 1Preliminary provisions

7Meaning of associated person and holding entity

  1. For the purposes of this Act, unless the context otherwise requires, a person (A) is associated with another person (B) if—

  2. B is A's holding entity or subsidiary; or
    1. more than half of the voting products of A, other than voting products that carry no right to participate beyond a specified amount in a distribution of either profits or capital, are held by B and persons that are associated with B (whether directly or indirectly, but other than in a fiduciary capacity); or
      1. more than half of the voting products of each of A and B, other than voting products that carry no right to participate beyond a specified amount in a distribution of either profits or capital, are held by members of the other (whether directly or indirectly, but other than in a fiduciary capacity); or
        1. the businesses of A and B have been carried on in such a manner that the separate business of each person, or a substantial part of it, is not readily identifiable; or
          1. there is another person with which both persons are associated.

            1. Associated person and associate have a corresponding meaning.

            2. For the purposes of this Act, a person is another person's holding entity if, and only if, that other person is its subsidiary.