{"id":4707,"date":"2012-07-02T13:44:52","date_gmt":"2012-07-02T13:44:52","guid":{"rendered":"https:\/\/gregorydamy.niceavocats.fr\/?p=4707"},"modified":"2023-08-02T08:09:08","modified_gmt":"2023-08-02T08:09:08","slug":"group-liability","status":"publish","type":"post","link":"https:\/\/gregorydamy.niceavocats.fr\/en\/group-liability\/","title":{"rendered":"Company law: legal independence of group companies"},"content":{"rendered":"

[et_pb_section fb_built=”1″ _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][et_pb_row column_structure=”1_3,1_3,1_3″ _builder_version=”4.19.5″ _module_preset=”default” background_enable_mask_style=”on” background_mask_style=”wave” background_mask_color=”rgba(0,0,0,0.08)” custom_padding=”||6px|||” locked=”off” global_colors_info=”{}”][et_pb_column type=”1_3″ _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][et_pb_circle_counter title=”Estimated reading time (in minutes)” number=”1″ percent_sign=”off” _builder_version=”4.19.5″ _module_preset=”default” title_font=”Amiri||||||||” max_width=”137px” global_colors_info=”{}”][\/et_pb_circle_counter][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][et_pb_divider _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_divider][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][et_pb_image src=”https:\/\/gregorydamy.niceavocats.fr\/wp-content\/uploads\/2023\/07\/meeting-room-10270_1280-2.jpg” title_text=”meeting-room-10270_1280-2″ _builder_version=”4.21.0″ _module_preset=”default” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″][\/et_pb_image][et_pb_text _builder_version=”4.21.0″ _module_preset=”default” text_font=”Amiri||||||||” global_colors_info=”{}”]<\/p>\n

In a\u00a0<\/span>corporate group<\/span><\/a>\u00a0, the entities\u00a0\u00a0<\/span>that make up\u00a0<\/span>\u00a0the group are legal persons that retain their legal independence from each other.\u00a0Furthermore, it is important to note that the group as a whole does not have legal personality.\u00a0Accordingly, the principle of the relative effect of agreements prohibits the creditor\u00a0\u00a0<\/span>of a subsidiary\u00a0<\/span>\u00a0from suing the parent company, unless the faulty interference of the parent company creates a misleading appearance which leads the creditor to believe that the parent company is also co-contractor.<\/span><\/p>\n

Legal independence of Group companies<\/span><\/h2>\n

Each entity within a group of companies has its own separate legal personality and operates independently of the other members of the group.\u00a0This means that the actions, obligations and responsibilities of a company within the group do not automatically extend to the others.\u00a0Each entity is responsible for its own contractual obligations, debts and legal consequences.<\/span><\/p>\n

Relative effect of agreements and responsibility of the parent company<\/span><\/h2>\n

The principle of the relative effect of agreements governs the relationship between the parties involved in a contract.\u00a0In the context of a group of companies, this principle limits the ability of the creditor of a subsidiary to take legal action against the parent company.\u00a0Unless the actions of the parent corporation create a misleading appearance, leading the creditor to reasonably believe that the parent corporation is a co-contractor, the parent corporation is generally not held liable for the debts or obligations of the subsidiary.<\/span><\/p>\n

In other words, for a creditor to hold the parent company liable, there must be evidence of wrongful interference by the parent company which misleads the creditor into believing that the parent company has a relationship direct contract with him.\u00a0This misleading appearance must be created by the actions of the parent company and not simply by the existence of a group relationship.<\/span><\/p>\n

Conclusion<\/span><\/a>\u00a0:<\/span><\/h2>\n

Entities within a group of companies retain their legal independence and the group itself has no legal personality.\u00a0Consequently, the principle of the relative effect of agreements prohibits the creditor of a subsidiary from suing the parent company, unless the faulty interference of the parent company creates a misleading appearance leading the creditor to believe that the parent company is also co-contractor.\u00a0This principle preserves the independence of each entity within the group and underlines the need for clarity and transparency in contractual relations.<\/span><\/p>\n

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In a\u00a0corporate group\u00a0, the entities\u00a0\u00a0that make up\u00a0\u00a0the group are legal persons that retain their legal independence from each other.\u00a0Furthermore, it is important to note that the group as a whole does not have legal personality.\u00a0Accordingly, the principle of the relative effect of agreements prohibits the creditor\u00a0\u00a0of a subsidiary\u00a0\u00a0from suing the parent company, unless the faulty […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[295],"tags":[],"class_list":["post-4707","post","type-post","status-publish","format-standard","hentry","category-commercial-and-company-law"],"yoast_head":"\nCompany law: legal independence of group companies - Soci\u00e9t\u00e9 d'avocats Damy<\/title>\n<meta name=\"description\" content=\"Group Liability In a group of companies, the entities comprising the group are legal persons that maintain their\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gregorydamy.niceavocats.fr\/en\/group-liability\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Company law: legal independence of group companies - 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