The Partition Effect in Relation to a Group of Companies

question 68

Multiple Choice

The partition effect in relation to a group of companies arose when:

• A) It was not permitted under corporations law to consolidate an entity that was not a company. This resulted not only in the non-company entity not being consolidated, but also all the entities (company or otherwise) that it controlled not being consolidated.
• B) The minority shareholders in a number of companies controlled by a parent entity organised themselves to block the transfer of funds within a group.
• C) Companies in a group co-ordinated to transfer assets in such a way as to protect part of the group from being taxed, thus reducing the total tax owing for the group as a whole.
• D) Dividends were declared and paid in such a way as to manage cash reserves within a group.
• E) None of the given answers.

---

Definitions:

Cochlear Duct

A spiral-shaped cavity in the cochlea that plays a critical role in the process of hearing by converting sound vibrations into neural signals.

Cochlear Duct

A spiral-shaped cavity within the cochlea of the inner ear, playing a crucial role in converting sound vibrations into nerve impulses.

Vestibular Canals

Channels within the inner ear that help to control balance and spatial orientation; part of the vestibular system.

Perilymph

The fluid that is located in the space between the membranous labyrinth and the bone in the inner ear.