Article 552 — Definition of Control

1/ “Control”, for the purpose of this chapter, is the power to formulate and govern, alone or with other shareholders, the financial and operating policies of a subsidiary. 2/ Without prejudice to Sub-Article (1) of this Article control of a subsidiary exists where a company owns, directly or indirectly, shares with voting rights representing more than half of the capital in that subsidiary. Nevertheless, the legal effects of “control” shall not follow if, under exceptional circumstances, it can be clearly demonstrated that such ownership does not constitute control. 3/ Where one company holds shares with voting rights representing half or less than half of the capital of another company, control exists over the second if the former has one or more of the following: a) the right to exercise more than half of the voting rights by virtue of an agreement with other shareholders; b) the right to control the financial and operating policies of the company under the memorandum of association or any agreement; c) the right to appoint or remove the majority of the members of the governing body, which has the power to run the business; or d) acquired the right to exercise the majority of votes at general meetings or an equivalent body and thus has actual control of the business. 4/ Control is presumed to exist under Sub-Article 3) (c) and (d) of this Article when a majority of the members of the governing body of a company has been appointed by a company holding half or less than half of the voting rights in the Relevant Company for two successive financial years. The Relevant Company is deemed to have effected such appointments if, during that financial year, it held a fraction of the voting rights greater than 40%, and if no other shareholder directly or indirectly held a fraction greater than its own.