Groups of companies : a comparative legal study

Abstract

The establishment of ‘groups’ and holding and subsidiary companies has […] led to the creation of new problems in company law, some of which have been mentioned above. Company law in many countries has attempted to keep pace with these developments and there exist rules in company legislation to cater for the new phenomenon. The most important rules relate to accounts and disclosure of information. Revenue law too has many rules which become applicable to a group relationship. Other provisions will be considered in the coming chapters. It is proposed now to outline the contents of this thesis. Chapter II will deal with the definition of holding and subsidiary companies under different company legislations, with particular reference to Malta and England. It will also consider the various ways in which a group or a holding-subsidiary relationship can be set up. Chapter III will then look into the problem of the separate personality of companies, tracing back the dominant case of Salomon vs Salomon as it has been developed by subsequent case-law. In this chapter, entitled ‘Lifting of the Veil’ the exceptions to the rule of separate personality will be delved into, with particular reference to groups of companies. Chapters IV and V will deal with the special statutory rules on holding and subsidiary companies, with particular reference to group accounts. Chapter VI deals with the internal relations between companies linked together in a group. The duties of parent companies to their subsidiaries are discussed followed by the means in which such duties can be enforced by minority shareholders. Finally, the scope of Chapter VII is to consider relations between the group on one hand and creditors on the other. The guarantee and safeguards available to such creditors will be discussed in the light of English and Continental law. Throughout the thesis, an attempt has been made compare English and Maltese law on one side, with German, French and European Community law wherever sufficient material has been available. The scope of such comparison has been to analyse English and Maltese law in the light of continental law and to recommend changes, where such changes are called for.