Study Of Parent Companies And Subsidiaries Legal Relationship

Business conglomerate, composed of parent company-subsidiary as its core component in market economy system, is a major market subject, which plays a very important role in promoting enterprise's ability in competition and dispersing operating risk. Adapting the legal relation between parent company and subsidiary has become a major part in company legislation all over the world. Investment from company or control agreement between companies puts into shape the legal relation between parent company and subsidiary, which gives chief expression to the internal administration and control relations between parent company and subsidiary and the external relations between parent company-subsidiary and subsidiary creditors and minor stockholders. This article mainly sets forth from the following four parts the legal relation between parent company and subsidiary.In part one, it's about the definition of the legal relation between parent company and subsidiary, whose concept and features get raised primarily by the author after the offering of the legal concept of parent company and subsidiary. The author also probes into the formation of the relation as well as some basic problems of it and emphasizes the significance of the research.In part two, from the angle of comparative law, the author introduces and assesses the parent company-subsidiary legislations of the representative nations in the two major law systems, such as the UK and the USA in common law system and German and Taiwan Province in continental law system. And this is used for reference for the revision of our Company Act.In part three what is mainly expounded is the legal relation between parent company and subsidiary. the internal relation between parent company and subsidiary embodies the following major aspects: (1),the parent company administrates and controls the subsidiary by way of share rights and control contracts;(2), the parent company administrates and controls the subsidiary's major conducts during its operation and development; (3), the parent company administrates and controls the subsidiary's financial statistics. In part three a very point in this article is discussed. It is the external legal relation between parent company and subsidiary,...