A group is a merger of several companies that have the same corporate object and are dependent on one another. Corporate law provides information about the obligations and rights of corporations, especially its sub-area of corporate law. I dr. Christian Andrelang, specialist lawyer for commercial and [link text=“Corporate Law Munich” id=“74″], would like to inform you in more detail about corporate law below.
##What exactly is corporate law?
Corporate law is a sub-area of corporate law. It deals with the rights and obligations of independent companies that are part of a group. Germany is one of the few countries that has precisely regulated corporate law.
##Different types of corporations:
The central feature of corporate law is the regulation on the merger and management of corporations. This varies depending on the type of group. What is always relevant is whether one company controls the other.
All group companies have an equal status. No company dominates the other. The management is regulated contractually after mutual consent.
There is a leading company on which the subordinate companies depend. The form is more common in practice than equal-order corporations. According to group law, subordinate companies are dependent if the leading company can directly or indirectly exercise influence on the other companies. The only thing that counts here is the possibility of exerting influence, without this actually having to be the case in practical terms.
In corporate law, a distinction is made between three other forms of subordinate corporations:
According to group law, the integration group occurs when a domestic company absorbs another company. The incorporated company retains its legal independence but functions internally like an operating department and not like an independent company. The prerequisite for integration is a majority position of at least 95 %. According to group law, the incorporation of a company must be entered in the commercial register.
A control agreement regulates the dominance of a company over its subordinate companies. The contract empowers the dominant company to take charge and give instructions. If damage occurs as a result of an instruction, the controlling company must also pay compensation under group law. About a control agreement
In order to be able to conclude, corporate law requires a majority of 75% in the general meeting of all companies.
If there is neither an integration nor a control agreement, it is a de facto group. There is then simply a dependency relationship. The dominant company has influence, but is not allowed to distribute instructions. If you would like to find out more about the sub-areas of corporate law, I would be pleased if you read the other articles on my blog.
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