A company is close if it is either controlled by five or fewer participators, or any number of participators who are directors1. The key concepts of what constitutes control and a director are discussed at D3.103. The commentary below explains how the interests of five or fewer participators or participators who are directors are aggregated to meet the control test.
Control by five or fewer participators
Provided it is not within one of the exemptions described in D3.113, a company is close if it is 'controlled' by five or fewer participators2.
In order to ascertain whether a company is controlled by five or fewer participators, the starting point is the current list of shareholders. In most cases, it will be clear whether or not a company is close. Either there are a large number of shareholders, none of whom holds a substantial number of shares (in which case the company will not be close), or the greater part of the share capital is held by five or fewer
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