When is a Parent Company Liable for the Actions of Its Subsidiary?
From a purely legal perspective, a parent company is a legal entity that is separate from the juridical personality of its subsidiary. Still, a question arises as to whether the legal fiction of the juridical entity of each company is always strictly adhered to. In other words, may the legal separation between a parent company and its subsidiary be disregarded so that the former may be liable for the actions of the latter? If yes, in what circumstances should a court pierce the corporate veil?
It is a widely held view by lawyers, judges, and legal commentators that the general rule should be that the limited liability of a parent company as a separate legal entity should be
…show more content…
For instance, in jurisdictions other than Jordan, the corporate veil was pierced where it was demonstrated that the parent company was a guarantor for its subsidiary or if the later acted as the agent of the former. Besides, where a parent company effectively makes the decisions issued in the name of its subsidiary, the former may well be found liable for the actions of the latter. Fraudulent transfer of the assets of one company to another affiliated company is another good justification for treating the relevant entities as one.
The Supreme Court of Jordan has tackled the issue of piercing the corporate veil in a case involving a holding company and its subsidiary. In broad terms, the Court held that a holding company is generally jointly with its subsidiary for the actions of the latter, at least, where the subsidiary is wholly-owned by the holding company.
The Decision of the Court of Appeal of Amman in the case number
…show more content…
On the facts of the case, AL Qabas for Real Estate Development Ltd (Qabas) agreed to sell to the plaintiffs a piece of land within the Aqaba Special Economic Zone. Qabas received a sum of money from the plaintiffs as part of the price of the land. Yet, the parties failed to record the sale at the Lands Department, which is a legal requirement to perfect the sale. Then, the plaintiffs brought an action against Qabas and Taameer Jordan Holdings (Taameer) which owns Al Qabas.
Taameer argued that there was no privity as between it and the plaintiffs and asked the court of first instance to dismiss the action against it accordingly. The court of first instance rejected Taameer's motion to dismiss the case. The Court of Appeal affirmed the decision of the trial court, citing the fact that, by the definition of a holding company under section 204 of the Companies Law, Taameer owned and managed Qabas.
The Decision of the Supreme Court of Jordan in the case number 3186/2014 dated 22 January,
425 A monopoly is the total control of a type of industry by one person or one company. What is a holding company? Pg.426 A holding company is a company whose primary business is owning a controlling share of stock in other companies.
" The term limited liability corporation" is not a legal term of art. The AICPA's Board apparently uses the term to refer to regular commercial corporations, as distinct from professional corporations ("PCs"), which are already permitted under the existing version of Rule 505.
John Adams once said, “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence”. In Jan Edwards and Molly Morgan’s article, “Abolish Corporate Personhood”, Edwards and Morgan argue that corporate personhood should be abolished since it causes unequal power distribution and is an artificial entity that the courts have allowed to become ‘superhuman’. Although the authors do state a few clear points, Edwards and Morgan do not fully grasp all aspects of corporate personhood and place more focus on constitutional background and the history of social injustices. To begin, Jan Edwards and Molly Morgan
1. In the broader context (not specific to Dollar General), what is KKR’s investment strategy? What are the challenges KKR will encounter to make its investment in Dollar General successful? How could KKR add value to Dollar General?
However, it must be determined whether Das’s promise to come until Monday constitutes sufficient consideration. Since, no deposit was made that is there was not sufficient consideration. Das would have to prove that he gave some sort of consideration to Ali to keep the offer open and if Das has taken a bank loan, the court may consider it as a valid consideration. Otherwise, the agreement does not stand according to the law. Therefore, Das cannot have any legal action against
The company can face lawsuits in various markets given - different laws and
Coles Supermarket Australia Pty Ltd is an Australian supermarket, owned by Wesfarmers. It is commonly known as Coles and was founded on 9th April 1914 in Smith St, Collingwood, Victoria. Till now, Coles has operated over 700 stores throughout Australia and employs over 100,000 employees. It controls 35% of Australian supermarket industry. Coles was founded when George James Coles opened the Coles Variety Store on the street in Melbourne.
Introduction A company’s success is measured by how well it is structured and organized in order to adapt to the changes in environment as well as the changes within itself such as the company’s scale, employees, product scope, etc. Having a suitable, well-structured organizational frame will not only increase the chance of being success but also prolong the company’s lifespan compared to an un-structured one. It is important to note that an organization’s structure needs to fit in with the current situation and does not necessarily required remain unchanged over time. Taking Dynacorp as an example, even though its functional structure contributed to the vast growth of the company at the start, its limitation in dealing with the changes within
The defendant, Gold Kist, Inc., claimed that their company had not committed any such trespass to Faulk’s land. The defendant did not intentionally commit a trespass onto the land, as they were always careful to operate the plant avoiding fertilizer spills, but quickly and thoroughly cleaning any that did occur. The defendant also claimed that the death of Faulk’s fish was not due to runoff via a drainage ditch from his plant, but could have been several other
SUPERMAX Corporation Berhad should be aware of their cultural differences in the workplace. Since there have a lot of different race in Malaysia and also most of the workers are from the different background so it can easily cause communication barrier happen between all the workers within the workplace. SUPERMAX should treat this issue seriously and handle it properly in order to avoid misunderstanding and tension between employees. It is vitally significant that there is a good relationship between all the employees and also the superior because it can affect the company’s productivity and efficiency. SUPERMAX should have cultural sensitivity in order to create a harmonious atmosphere in the workplace at the same time it can improve the performance of the company.
Franchising and decision variables The article in Franchising versus company-run operations: Modal choice in the global hotel sector discusses the various aspects considered by well-established hotels when they face the dilemma of whether to franchise a new hotel in a new geography or actually own the hotel themselves. The article is helpful in drawing the parallels for franchising decisions in service industry and especially pretty apt for the services which include high initial capital investment. The authors (F J Contractor & S K Kundu) borrow the definition of franchising from Caves & Murphy 1976 at the onset of the article and visualize the prospective franchisee as the sales agent or distributor of the brand owner.
Motilal oswal securities Ltd The Motilal oswal ltd company was the parent company of the Motilal oswal securities ltd, it was the subsidiary company. Motilal Oswal Company was established by Motilal oswal and Raamdeo agarwal in 1987 and gets the membership from the BSE. It got it final certificate of registration approval in the year 2010 from the securities and exchange board of India regarding the setup and expansion of the business of mutual funds in the country. Motilal oswal securities ltd was incorporated in the year 1994 and its main business is stock broking and wealth management. Motilal Oswal Company has 99.95 % holdings previously which became 100 % holdings In Motilal securities ltd .It was one of the subsidiary company of the
4.2.1 JO MALONE 4.2.1.1 Strategy Jo Malone Company takes its name from the brand creator. Jo Malone was a stylist that wanted to give a special present to her VIP clients, creating a special bath oil with natural ingredients like nutmeg and Ginger. (Gordo, 2013) Jo Malone London was created to celebrate British style with unexpected fragrances and the elegant art of gift giving.
Kraft Heinz Case Study Executive Summary Problem Statement The focal problem that Kraft Heinz Company (KHC) faces is the decrease in demand of packaged-foods, while trying to increase revenue. Analysis This analysis studies Kraft Heinz Company’s strategy, competitive position in the market, problems being faced, and the company’s financials.
In the said case, the counsel for the appellants tried to argue before the Court of Appeal that the decision in the case Rama Chandran v The Industrial Court of Malaysia & Anor was wrong. Because the court was heard in the Federal Court, the Court of Appeal disagreed. It was also