What is a corporate group?
The company group is a number of related corporations that are considered one entity for legal, accounting or tax purposes. The group consists of parent corporations and more subsidiaries that are a parent completely or mostly. Most jurisdictions define the company group in the same way, but the functional outcome of the grouping of separately incorporated companies together differs depending on the Party Act in a particular country.
corporations tend to set up subsidiaries to create a line of definition between the operation of one corporation in relation to the other. The parent company still owns a subsidiary, but because the subsidiary is self -incorporated, it has more independence than the division of parents. It has its own management, operations and financial systems. In countries where the rights of society recognize established entities as independent individuals for liability purposes, the parent and subsidiary of the company are completely protected by Against the legal obligation of the other.
A group of parents and subsidiaries has a natural relationship to each other because the parent of their own subsidiary society. The treatment of the group as one entity is permitted by some parts of the law in the country where the corporations are of residence. According to the law, this treatment may be authorized for the purposes of financial reporting, tax or legal liability. It is important to realize that the consideration of self -incorporated entities is the only entity to undermine the reasons for the integration of subsidiaries in the first place, so it is necessary to ensure that the functional consequences of consolidation of corporations in various jurisdictions can be understood.
In the US, the Federal Tax Act allows related companies in the company group to file a consolidated tax return. Consolidation makes the parent company responsible for the inclusion of financing on subsidiaries in one overall presentation that represents the way in which mutually mutuallyConnected transactions affect the financial situation of the whole group. The group is considered to be one entity for the purposes of financial reporting and tax, but each company retains its legal status of a separate entity in each other way.
Germany and some other European countries consider the company group to be one entity for both economic and legal matters. Unlike the US, the rights of the company do not allow members of the group to maintain independent legal liability if their finances are maintained together. The company group in these countries is called "concern" and the Act on Corporate Rights governing the Management of the Group is referred to as the "Law of Fears".