The Duties of Parent Companies
Hanne Birkmose, Shareholders’ Duties, Kluwer Law International (2017 Forthcoming)
Posted: 30 Nov 2016
Date Written: November 27, 2016
The chapter considers the duties of parent companies in respect of the actions or inactions of their subsidiaries. The extent to which the corporate veil may be disregarded and/or liability imposed in such cases is discussed with particular reference to UK company law. Consideration is also given to the alternative approach involving respecting the separate legal personality of the subsidiary but imposing duties directly on the parent company arising from a separate and free-standing duty imposed on the parent company. Through its own actions or omissions, the parent company may have been directly or indirectly involved in the wrongdoing perpetrated by the subsidiary. These duties which may stem from statute, agency, tort or trust are examined. Finally, the chapter evaluates a number of proposals for statutory reform which have been made which involve the imposition of additional duties on parent companies and explores the underlying justification for such proposals.
Keywords: Duties of parent companies, actions/inactions
JEL Classification: K22
Suggested Citation: Suggested Citation