Corporations
Corporations constitute a group if they are related corporations within the meaning of the Corporations Act 2001.
For the purpose of assessing whether corporations are related under that Corporations Act 2001, they are taken to carry on a business and not to be trustee companies.
Where corporations are related under Section 50 of the Corporations Act 2001 related corporations constitute a group for the purposes of assessment of payroll tax even though a member of the group may not be an employer paying wages.
The Corporations Act 2001 defines 'related corporations' and includes the following:
a holding company and its subsidiary
two or more subsidiaries of a common holding company
a subsidiary and its subsidiary.
A holding company is a company having one or more subsidiaries. A subsidiary is a company of which another company:
controls the composition of its board, or
is in a position to cast, or control the casting of more than one half of the maximum number of votes that might be cast at a general meeting of the company, or
holds more than one half of the issued share capital.
This means that a group not only includes those corporations which are in a direct holding/subsidiary relationship but also:
corporations with common holding corporations, or
corporations with a common ultimate holding corporation.
It is important to note that the physical location of a holding company is irrelevant. This has implications for members of groups which have holding companies that are registered outside of Australia.
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