Group company group or company is a set of parent and subsidiary companies that function as a single economic entity through the same control source. Group concepts are often used in tax laws, accounting and (less) corporate law to link the rights and obligations of one group member to another or the whole. If the company is involved in a completely different business, the group is called a conglomerate. The formation of a group of companies usually involves consolidation through mergers and acquisitions, although group concepts focus on instances where corporate entities are merged and acquired persisted rather than instances where they are dissolved by parents. The group may be owned by a parent company that may not have an actual operation.
In Germany, where a sophisticated law of "concern" has been developed, corporate group law is a fundamental aspect of its corporate law. Many other European jurisdictions also have similar approaches, while Commonwealth countries and the United States adhere to the formalistic doctrine that refuses to "penetrate the corporate veil": corporations are treated outside taxes and accounting as entirely separate legal entities.
Video Corporate group
Legal independence
The group of companies consists of companies. The general rule is that a company is a legal entity separate from its shareholders, ie the shareholder obligations for a subsidiary's debt are limited to the value of the stock, and the shareholders can not be required to perform corporate obligations.
However, some jurisdictions make exceptions to this rule. For example, Germany has created an affiliated company law that provides a situation in which one company is responsible for the debts of another company. In New Zealand, the Company Law provides that related company assets may be collected to pay the creditor if one of the companies is liquidated. However, the circumstances under which this power will be implemented are very narrow.
- Berkey v Third Avenue Railway
Maps Corporate group
Economic dependency
- Attention (business)
- DHN v Tower Hamlets LBC
- Company Regulation on Seventh EU 83/349, on group accounts
- EU Draft Rule of the Ninth Company Law, on group of companies
Legal
Tax
Accounting
- The EU Seventh Company Law Rules 83/349, on group accounts
Civil Code
- Salomon v Salomon
- Berkey v Third Avenue Railway
- Adams v Cape Industries plc
Codetermination
- Mitbestimmungsgesetz
Definitions
Leff defines the business group as a group of companies doing business in different markets under general administration or financial control whose members are linked by interpersonal trust relationships on the basis of similar ethnic or commercial backgrounds. One method of defining groups is as a group of companies that are legally different from managerial relationships. The relationship between companies in a group can be formal or informal. Keiretsu is one of a kind business group. Worry is another thing.
Encarnation refers to an Indian business house, emphasizing various forms of bonding among group members. Powell and Smith-Doerr stated that business groups are corporate networks that regularly collaborate over long periods of time. Granovetter argues that business groups refer to intermediate binding rates, excluding on the one hand a set of firms that are bound only by short-term alliances and on the other a set of companies is legally consolidated into one unit. Williamson claims that business groups are between markets and hierarchies; this is done further by Douma & amp; Schreuder. Khanna and Rivkin stated that business groups are usually not legal constructs although some regulatory bodies have attempted to codify definitions. In the United Arab Emirates, a business group can also be known as a trade association. Common examples are Adidas Group or Icelandair Group.
See also
- Business alliance
- Chaebol
- Caution
- Conglomerate
- Parent company
- Keiretsu
- Subsidiaries
- Zaibatsu
- Who Owns Who (set of annual directories)
Note
References
Source of the article : Wikipedia
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