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How do I work out how many associates my company has?

Associated Companies

A company’s corporation tax thresholds and rates from 1st April 2023, as well as employment allowance, are affected by the number of associates that company has.  If you get this wrong, then penalties may be levied.

Working out the number of associates that your company has can be very tricky so please do discuss so it may be correctly ascertained.  Only inactive companies and passive holding companies (see notes below) may be excluded, and overseas companies still count.

Here is a brief look at the main ways one company and another company could be classed as associates: –

  1. Companies controlled by the same person or by each other.

Who can or could control your company?  It may be an individual person or a company – AND there may be more than one answer after testing all the options.

  • shareholdings
  • voting rights
  • right to distributions e.g. dividends
  • rights to assets on a sale or winding up.

AND do not forget to consider the answer not just now but in the future e.g. at the point of sale or when share options may be exercised.

Now you have the answer(s) to who controls your company, you must look at how many other companies are also controlled or could be controlled by that same person/company.

And if that is a company, then do not forget to include that company too.

Now if you think that was difficult – it was only part 1!


  1. Companies who could be controlled by the same group of persons.

If a group wanted to stage a takeover, they would need more than 50% i.e. control.  Hence, we are looking at any group that could be got together to exert control i.e. such that 50% was exceeded, but once exceeded then no further group members are required. Such a group is termed a minimum controlling combination (MCC).

Again there could be more than one answer, when we are identifying the groups who could control your company.

Remember we are applying the same rules as part one but now we are starting by identifying groups not individuals who could have control, now, in the future and in any sense.

  1. Associates by attribution

When initially considering part 1 and part 2 we look at each individual and their personal rights only.

However, there can be occasions when we need to attribute to that individual, not only the rights they hold personally but the rights held by their personal associates (see notes below) e.g. the joint holdings of husband and wife.

These occasions are when 2 companies have Substantial Commercial Interdependence (SCI) i.e. in some way share or reply on a common factor such as an office.

So first identify any company that has Substantial Commercial Interdependence with yours (see notes below).  If there are none and your company is standing alone then no need to proceed further.

However if there is such a company then you need to reassess under Part 1 and Part 2 but this time when looking at who has control you need to include/attribute the rights of each person’s personal associates to them, not just their own personal rights.



Minimum Controlling Combination MCC

Any combination of individual who could between them control the company.


Passive Holding Companies

Holding companies may only be excluded if “passive” – shell only, only asset is shares, all dividends received are passed on immediately in full.


Personal Associates of an individual P

Spouse or civil partner

Direct Blood relatives – (Grand)parents/children and siblings

Business Partners

Trustees of trusts of which P is beneficiary or settlor or a relative of P is settlor.


Substantial commercial interdependence SCI

Substantial commercial interdependence is judged considering the degree to which two company share or rely on common factors.

Three areas are looked at in making this judgment.

  1. Financial interdependence e.g.
  • Loans or financial support of each other
  • Or common financial support
  1. Economic interdependence e.g.
  • A common goal
  • Shared benefit
  1. Organisational interdependence e.g.
  • common employee(s)
  • common premises
  • common assets
  • common equipment

This is a very complicated and important issue so please do document it and discuss it with professional such as us, so your company tax return is correct.

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