Control Test
/ˈkɒn.trəʊl tɛst/
Definitions
- (n.) A legal standard used to determine which party exercises control over an entity or activity for purposes of liability or regulatory compliance.
The court applied the control test to decide which company was liable for the employee's actions.
- (n.) A criterion in tax law to ascertain if a corporation is controlled by certain shareholders for tax consolidation or attribution rules.
Under the control test, shareholders owning more than 50% of voting rights are considered controllers for tax purposes.
Forms
- control test
- control tests
Related terms
See also
Commentary
The control test often appears in contexts assessing liability or tax status; clarity on the type of control (operational, voting power, etc.) is essential in legal drafting.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.