continued    

SCHEDULES

Section 10

Schedule 1 Trigger events: holding of interests and rights

Joint interests

15If two or more persons each hold an interest or right jointly, each of them is
treated as holding that interest or right.

Joint arrangements

2(1)If interests or rights held by a person and interests or rights held by another
person are the subject of a joint arrangement between those persons, each of
10them is treated as holding the combined interests or rights of both of them.

(2)A “joint arrangement” is an arrangement between the holders of interests or
rights that they will exercise all or substantially all the rights conferred by
their respective interests, or their respective rights, jointly in a way that is
pre-determined by the arrangement.

15Indirect holdings

3(1)An interest or right held indirectly by a person is to be treated as held by the
person.

(2)A person holds an interest or right “indirectly” if the person has a majority
stake in an entity and that entity—

(a)20holds the interest or right, or

(b)is part of a chain of entities—

(i)each of which (other than the last) has a majority stake in the
entity immediately below it in the chain, and

(ii)the last of which holds the interest or right.

(3)25For these purposes, A has a “majority stake” in B if—

(a)A holds a majority of voting rights in B,

(b)A is a member of B and has the right to appoint or remove a majority
of the board of directors of B,

(c)A is a member of B and controls alone, pursuant to an agreement
30with other shareholders or members, a majority of the voting rights
in B, or

(d)A has the right to exercise, or actually exercises, dominant influence
or control over B.

(4)In the application of this paragraph to the right to appoint or remove a
majority of the board of directors, an entity is to be treated as having the
right to appoint a director if—

(a)a person’s appointment as director follows necessarily from that
5person’s appointment as director of the entity, or

(b)the directorship is held by the entity itself.

(5)In this paragraph—

(a)the reference to the right to appoint or remove a majority of the board
of directors of an entity is to the right to appoint or remove directors
10holding a majority of the voting rights at meetings of the board on all
or substantially all matters,

(b)the reference to the board of directors, in the case of an entity that
does not have such a board, is to be read as a reference to the
equivalent management body of that entity,

(c)15references to “voting rights” are to be read in accordance with section
8(7).

Interests held by nominees

4An interest held by a person as nominee for another is to be treated as held
by the other (and not by the nominee).

20Rights treated as held by person who controls their exercise

5(1)Where a person controls a right, the right is to be treated as held by that
person (and not by the person who in fact holds the right, unless that person
also controls it).

(2)A person “controls” a right if, by virtue of any arrangement between that
25person and others, the right is exercisable only—

(a)by that person,

(b)in accordance with that person’s directions or instructions, or

(c)with that person’s consent or concurrence.

Rights exercisable only in certain circumstances etc

6(1)30Rights that are exercisable by a person only in certain circumstances are to
be treated as held by the person only—

(a)when the circumstances have arisen, and for so long as they continue
to obtain, or

(b)when the circumstances are within the control of the person.

(2)35But rights that are exercisable by an administrator or by creditors while an
entity is in relevant insolvency proceedings are not to be regarded as held by
the administrator or creditors even while the entity is in those proceedings.

(3)“Relevant insolvency proceedings” means—

(a)administration within the meaning of the Insolvency Act 1986,

(b)40administration within the meaning of the Insolvency (Northern
Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)), or

(c)proceedings under the insolvency law of another country or territory
during which an entity’s assets and affairs are subject to the control
or supervision of a third party or creditor.

(4)Rights that are normally exercisable but are temporarily incapable of
exercise are not for that reason to be treated as not being held.

Rights attached to shares held by way of security

7Rights attached to shares held by way of security provided by a person are
5to be treated as held by that person—

(a)where apart from the right to exercise them for the purpose of
preserving the value of the security, or of realising it, the rights are
exercisable only in accordance with that person’s instructions, and

(b)where the shares are held in connection with the granting of loans as
10part of normal business activities and apart from the right to exercise
them for the purpose of preserving the value of the security, or of
realising it, the rights are exercisable only in that person’s interests.

Connected persons

8Two or more persons who are connected with each other (within the
15meaning given by paragraph 9 or 10) are each to be treated as holding the
combined interests or rights of both or all of them.

9(1)Two or more undertakings are connected if they are group undertakings in
respect of each other.

(2)In sub-paragraph (1), “undertaking” and “group undertaking” have the
20same meanings as in the Companies Act 2006 (see section 1161 of that Act).

10(1)An individual, A, is connected with another individual, B, if—

(a)A is B’s spouse, civil partner or cohabitee,

(b)A is a relative of B,

(c)A is the spouse, civil partner or cohabitee of a relative of B,

(d)25A is a relative of B’s spouse, civil partner or cohabitee, or

(e)A is the spouse, civil partner or cohabitee of a relative of B’s spouse,
civil partner or cohabitee.

(2)For the purposes of sub-paragraph (1)—

(a)two persons who are living together as if they were a married couple
30or civil partners are cohabitees,

(b)references to a spouse, civil partner or cohabitee include a former
spouse, civil partner or cohabitee, and

(c)“relative” means a brother, sister, uncle, aunt, nephew, niece, lineal
ancestor or descendant (the stepchild of any person, or anyone
35adopted by a person, whether legally or otherwise as their child
being regarded as a relative or taken into account to trace a
relationship in the same way as that person’s child).

Common purpose

11(1)Two or more persons who share a common purpose in relation to an asset or
40entity are each to be treated as holding the combined interests or rights of
both or all of them.

(2)The cases in which persons share a common purpose in relation to an entity
include (but are not limited to) cases in which the persons co-ordinate their
influence on the activities, operations, governance or strategy of the entity.

(3)The cases in which persons share a common purpose in relation to an asset
include (but are not limited to) cases in which the persons co-ordinate their
influence on the way in which the asset is used, and section 9(2) applies for
the purposes of this sub-paragraph.

5Arrangements

12(1)In this Schedule “arrangement” includes—

(a)any scheme, agreement or understanding, whether or not it is legally
enforceable, and

(b)any convention, custom or practice of any kind.

(2)10But something does not count as an arrangement unless there is at least some
degree of stability about it (whether by its nature or terms, the time it has
been in existence or otherwise).

Section 58

Schedule 2 Minor and consequential amendments and revocations

115The Enterprise Act 2002 is amended in accordance with paragraphs 2 to 10.

2(1)Section 23 (relevant merger situations) is amended as follows.

(2)For subsections (1) and (2) substitute—

“(1)For the purposes of this Part, a relevant merger situation has been
created if—

(a)20two or more enterprises have ceased to be distinct enterprises
at a time or in circumstances falling within section 24; and

(b)the value of the turnover in the United Kingdom of the
enterprise being taken over exceeds £70 million.

(2)For the purposes of this Part, a relevant merger situation has also
25been created if—

(a)two or more enterprises have ceased to be distinct enterprises
at a time or in circumstances falling within section 24; and

(b)as a result, one or both of the conditions mentioned in
subsections (3) and (4) below prevails or prevails to a greater
30extent.”

(3)Omit subsections (2A), (4A) and (4B).

(4)In subsection (5), for “(3), (4), (4A) or (4B)” substitute “(3) or (4)”.

(5)In subsection (6), for “(3), (4), (4A) and (4B)” substitute “(3) and (4)”.

(6)Omit subsection (10).

335Omit section 23A.

4In section 35(7) (questions to be decided in relation to completed mergers),
for “, for the purposes of section 23(2)(b), the share of supply test is met,”
substitute “any such result as is mentioned in section 23(2)(b) has arisen,”.

5In section 36(6) (questions to be decided in relation to anticipated mergers),
for “, for the purposes of section 23(2)(b), the share of supply test will be
met,” substitute “any such result as is mentioned in section 23(2)(b) will
arise,”.

65In section 48(3) (cases where references or certain questions need not be
decided), for “, for the purposes of section 23(2)(b), the share of supply test
is or will be met,” substitute “any such result as is mentioned in section
23(2)(b) has arisen or the question whether any such result will arise,”.

7In section 58 (specified considerations), omit subsections (1) and (2).

810In section 59 (intervention by Secretary of State in special public interest
cases), omit subsections (3)(b)(i), (3B), (8) and (9).

9In section 153 (specified considerations), omit subsection (2).

10In paragraph 20(1) of Schedule 8 (national security) omit “(within the
meaning of section 58(1))”.

1115In consequence of the preceding paragraphs, the following are revoked—

(a)the Enterprise Act 2002 (Share of Supply Test) (Amendment) Order
2018 (S.I. 2018/578),

(b)the Enterprise Act 2002 (Turnover Test) (Amendment) Order 2018
(S.I. 2018/593),

(c)20the Enterprise Act 2002 (Share of Supply) (Amendment) Order 2020
(S.I. 2020/748), and

(d)the Enterprise Act 2002 (Turnover Test) (Amendment) Order 2020
(S.I. 2020/763).