In addition to the company satisfying the two conditions in ERSM61030 during the period of account, the directors and auditors must comply with the following third and fourth conditions after the end of the period of account. If they do not, FA88/S86 (1) will not be satisfied and the subsidiary will be a dependent subsidiary for that period of account.
Per FA88/S86 (1)(c), the directors of the group parent must give a certificate that in their opinion the two conditions in ERSM61030 are satisfied in relation to the period of account. The certificate must be given
The group parent for this purpose is the principal company of
the group as defined in FA88/S86 (3). It is a company which
has a subsidiary, but which is not itself a subsidiary. It is
therefore the ultimate parent company, whether it is a United
Kingdom company or an overseas company.
In the absence of a certificate for a period of account, a subsidiary is a dependent subsidiary for that period of account, even if it is clear that the two conditions in ERSM61030 are in fact satisfied for that period.
Per FA88/S86 (1)(d), a report is to be attached to the certificate, addressed to the directors by the auditors of the subsidiary, that the auditors
As with the certificate, the absence of the auditors' report means that the subsidiary is a dependent subsidiary for the period of account even if the two conditions in ERSM61030 appear to be satisfied.
Because the question of whether or not a company is a dependent subsidiary is a factual one, which cannot be determined until the end of the accounting period, and then not until the relevant certificates have been provided, it is never possible to give advance clearance before the certificates have been received.