140C.-Cases where interest to be treated as only conditional.

(1) For the purposes of sections 140A and 140B (but subject to the following provisions of this section) a beneficial interest in shares is only conditional for so long as the terms on which the person with that interest is entitled to it-

(a) provide that, if certain circumstances arise, or do not arise, there will be a transfer, reversion or forfeiture as a result of which that person will cease to be entitled to any beneficial interest in the shares; and
(b) are not such that, on the transfer, reversion or forfeiture, that person will be entitled in respect of his interest to receive an amount equal to or more than the amount that might reasonably be expected (if there were no provision for transfer, reversion or forfeiture) to be obtained from a sale of that interest in the open market at that time.

[(1A) A person shall not for the purposes of sections 140A and 140B be taken, in relation to any shares in a company or any security, to have an interest which is only conditional by reason only that one or more of subsections (2) to (4) below applies in relation to him¹⁹.]
(2) [This subsection applies in relation to a person if²⁰], in a case where there is no restriction on the meeting of calls by that person, the shares-

(a) are unpaid or partly paid; and
(b) may be forfeited for non-payment of calls.

(3) [This subsection applies in relation to a person if²⁰] the articles of association of the company require him to offer the shares for sale[ or transfer them ¹⁹] [if he ceases to be an officer or employee of the company or of one or more group companies or of any group company²⁰.]
[(3A) This subsection applies in relation to a person if he may be required to offer the shares for sale or transfer them, if, as a result of misconduct, he ceases to be an officer or employee of the company or of one or more group companies or of any group company¹⁹.]
(4) [This subsection applies in relation to a person if²¹] the security may be redeemed on payment of any amount.
(5) In subsection (1) above the references, in relation to the terms of a person's entitlement, to circumstances arising include references-

(a) to the expiration of a period specified in or determined under those terms or the death of that person or any other person; and
(b) to the exercise by any person of any power conferred on him by or under those terms²².]

[(6) For the purposes of this section-

(a) a company is a "group company" in relation to another company if they are members of the same group, and
(b) companies are taken to be members of the same group if, and only if, one is a 51 per cent. subsidiary of the other or both are 51 per cent. subsidiaries of a third company¹⁹.]