Type of Controlling

Parent-Subsidiary Relationship

1

Casting Control

The parent company as clarified under the Jordanian legislation is a corporation that owns 50% of voting stock of its subsidiary, having half of the capital of the subsidiary means owning enough voting stock. The Jordanian legislature enables the parent company to control operation and management of the subsidiary by making it owns enough voting stock, as well as it vitally participates in the election or influence of subsidiary’s board of directors.

2

Management & Financial Controlling

The Jordanian legislature ensures the administrative hegemony of the parent over the subsidiary’s management in section 204 (1) the Company Act, through influencing or electing the board of directors.

3

Contractual Controlling

This type of parent company’s controlling over its subsidiary is not known under Jordanian legislation, while it is recognized under English which ensures it in section 736 as a contractual agreement between the parent company and the shareholders who own the majority of voting stocks in the capital of its subsidiary.