Journal of Comparative Law

Journal of Comparative Law

Liability of mother company through the control of subsidiary company with inadequate capital in the law of Germany and Iran

Document Type : Research Article

Authors
Fereshteh Ahmadinia 1
Rasoul Mazaheri Kohanestani 2
Manouchehr Tavassoli Naeini 3
Alireza Arashpour 3
1 Ph.D. Student in Private Law, Department of Law, University of Isfahan, Isfahan, Iran.
2 Assistant Professor, Faculty of Law, Department of Law, University of Isfahan, Isfahan, Iran
3 Associate Professor, Faculty of Law, Department of Law, University of Isfahan, Iran.
10.22096/law.2022.113674.1517
Abstract


Corporate groups are collections of independent mother and subsidiary companies that their performances as a single economic unit are controlled by a common source. One the one side, these companies in front of individuals economically appear as a single economic unit, for the fact that group members (subsidiary companies) work under the control and guidance of mother company in order to achieve collective goals and interests, and at the same time legally, each of these subsidiary companies has independent legal personality and its own rights and obligations.German law as the leading system in the field of corporate groups law, while accepting independent legal personality principle and limited liability rule, due to the governance and control that mother company has over the subsidiary with inadequate capital (inadequacy of capital) and disproportionate to company’s economic goals, knows mother company liable for payment of the debts and fulfillment of the obligations of subsidiary company to the third parties.
Keywords
Subsidiary Company
Mother Company
Corporate Groups
Control Theory
Inadequate Capital

Subjects

 
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Journal of Comparative Law
Volume 9, Issue 1 - Serial Number 17
Spring & Summer 2022- Issue 17
August 2022
Pages 83-108