Related Party Transactions and Intragroup Transactions

29 Pages Posted: 15 Aug 2018 Last revised: 13 May 2020

See all articles by Jens Dammann

Jens Dammann

University of Texas at Austin - School of Law; European Corporate Governance Institute (ECGI)

Date Written: August 15, 2018


In the context of corporate groups, related party transactions pose particular challenges. On the one hand, transactions within corporate groups are often economically desirable. The very raison d’être of a corporate group may be to facilitate transaction between its constituent companies. On the other hand, the very frequency, volume, and depth of intragroup transactions make them particularly suitable vehicles for illicitly extracting wealth from a corporation at the expense of minority shareholders and creditors. Moreover, traditional techniques for policing related party transactions, such as judicial fairness review and or requirements that the transaction be approved by disinterested decision-makers can easily become impracticable where, as in the intragroup context, self-dealing transactions are the norm rather than the exception. It is therefore unsurprising that different legal systems have developed additional legal techniques for policing intra-group transactions in the context of corporate groups. The present contribution seeks to provide a survey over these different approaches and explain how they help to reduce the social costs of self-dealing.

Suggested Citation

Dammann, Jens, Related Party Transactions and Intragroup Transactions (August 15, 2018). U of Texas Law, Law and Econ Research Paper No. e583. Available at SSRN: or

Jens Dammann (Contact Author)

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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