In order to expand its business, a few years ago, Leeds Ltd purchased 43% of the ordinary shares of Salford Ltd. The remaining 57% shareholdings are held by three other shareholders who possess the equal proportions of shares. Required: (1) Explain the concept of de facto control. (40 to 50 words) (2)According to the above scenario, explain whether Leeds Ltd can control Salford Ltd. (50 to 60 words)
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In order to expand its business, a few years ago, Leeds Ltd purchased 43% of the ordinary shares of Salford Ltd. The remaining 57% shareholdings are held by three other shareholders who possess the equal proportions of shares.
Required:
(1) Explain the concept of de facto control. (40 to 50 words)
(2)According to the above scenario, explain whether Leeds Ltd can control Salford Ltd. (50 to 60 words)
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