Corporate groups. Subsidiaries and parent companies, in the World.

Corporate groups

Subsidiaries and parent companies.

Corporate groups on some continents of the planet, legal criteria for determining the Group as the only economic entity in the market. Determining the liability between the subsidiaries and the parent of a corporate group compared with civil offenses.

Group of company in United Kindom. An enterprise links its relationships to a group of companies that consists of a parent/holding company and subsidiaries to minimise their risk and maximise their profit. There are four ways in which the relationship of holding company and subsidiary may arise: 1 - Where the holding company holds a majority voting rights in the subsidiary. 2 - Where the holding company is a member of the subsidiary and has the right to appoint or remove a majority of its board of directors. 3 - Where the holding company is a member of the subsidiary and controls alone, pursuant to an agreement with the shareholders or members, a majority of the voting rights in the subsidiary. 4 - Where the subsidiary is a subsidiary of a company which itself a subsidiary of the holding company. However, this definition only stated what a subsidiary is and does not define what a group relationship is meant to be. The Companies Act went on to define a group structure in S.1162 (United Kingdom, Companies Act 2006, Chapter 46, part 38, section 1162 ) as a company will be the parent if it has the right to exercise a 'dominant influence' over a company by virtue of provisions contained in the articles of the subsidiary, or by virtue of a control contract. There are other reasons why a company form a group. This includes raising capital and facilitating external borrowing will be easy; and intercompany loans and transfer of assets will be permitted. Also, it may be convenient administratively, more proficient economically and more suitable geographically especially when overseas ventures are being carried out. It can therefore be inferred from the above that the corporate group structure allows for huge creation of wealth.

Group of company in United States. A corporation is a legal entity created through the laws of its state of incorporation. Individual states have the power to promulgate laws relating to the creation, organization and dissolution of corporations. Many states follow the Model Business Corporation Act. (See Minnesota's adoption.) State corporation laws require articles of incorporation to document the corporation's creation and to provide provisions regarding the management of internal affairs. Most state corporation statutes also operate under the assumption that each corporation will adopt bylaws to define the rights and obligations of officers, persons and groups within its structure. States also have registration laws requiring corporations that incorporate in other states to request permission to do in-state business. The application of MINNESOTA Business Corporation enables to constitute, by merger, corporate groups (section 302A 621, section 302A 626). Following the merger, the subsidiary is wholly controlled by Holding unlike European Union law where the parent company may have a control power, even non-total and variable from 10% to 100%, through connection agreement and not fusion.

In European company law is considered as a group of companies when the controlling parent in the merger exceeds a decisive influence of more than 50% (little under the 100%) and becomes the only economic entity for the market compared to the competition than and the liability. It seems to many doctrines that it is not possible to establish only legal-formal parameters if a parent company and its subsidiary (or its subsidiaries) act on the market as a single enterprise. It can not be established solely on the basis of corporate law if a subsidiary can independently determine its behavior on the market or if it is exposed to the determining influence of its parent. Otherwise, the parent companies concerned would find it easy to evade the responsibility for the illicit behavior of their 100% subsidiaries by invoking (only) the circumstances of company law. The link between the corporate group and the legal parameter can not be overlooked: if a controlling party, through an agreement exceeds 40%, controls the subsidiary on the economic dynamics of the agreement, it is the responsible of administrative malpractices from applying the legal parameter that in some countries of the European Union (excluding Italy) which he considers groups and therefore only economic entity if the control in the merger exceeds 50% and even in the case of large controlled companies, it must be total and can not therefore be limited to the economic dynamics that affect the agreement, it would be not responsible for illegal (civilian, statutory) placed by the group; responsibility would only be for the subsidiary. The Italian Civil Code considers the Group also considering the contractual link that binds the subsidiary and the parent company in business dynamics and administrative, civil liability. This must be an agreement from where it is possible to deduct a control influence between the subsidiary and the parent company of at least 10% (20% for companies without quoted shares).

ALLEGATI: United Kingdom, Companies Act 2006, Chapter 46, part 38, section 1162 - copy | United Kingdom, Companies Act 2006, Chapter 46 - copy | Minnesota Statutes, 302A.621 MERGER OF SUBSIDIARY - authentic copy | Minnesota Statutes, 302A.626 MERGER TO EFFECT A HOLDING COMPANY REORGANIZATION - authentic copy | Minnesota Statutes, 302A.631 ABANDONMENT - authentic copy | Minnesota Statutes, 302A.105 INCORPORATORS - authentic copy | Minnesota Statutes, 302A.111 ARTICLES - authentic copy | Minnesota Statute 302A.115 CORPORATE NAME - authentic copy |

Web site recommended: Legislation Government United Kingdom | The Office of The Revisor of Statutes, Minnesota Statutes | European Union law |.