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Concern (business)
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Concern (business)
A concern (German: Konzern [kɔnˈtsɛʁn] ⓘ) is a type of business group common in Europe, particularly in Germany. It results from the merger of several legally independent companies into a single economic entity under unified management.
A concern consists of a controlling enterprise and one or more controlled enterprises. The relationship between the controlling and controlled enterprises is based on the actual commercial and management relationships, unlike parent and subsidiary companies which are related by share ownership and voting rights.
Outside of professionals, the term Group, also mistakenly within the meaning of large companies – regardless of its corporate structure – is understood.
The Group concept has antitrust relevance: the so-called Group privilege, the privilege of the consolidated Group companies involved, means that in itself, prohibition included practices that do not violate German or European Commission (EC) antitrust law. On the other hand, the Group concept in the Banking Act is to the formation of a borrower unit to access large credit facilities.
The 1965 Aktiengesetz, literally "stock law", but commonly known in English as the German Stock Corporation Act, defines a concern as: "one dominant and one or more dependent companies, together under the unified leadership of the ruling company".
The Aktiengesetz applies only to any Aktiengesellschaften (AG; literally "stock company"; singular Aktiengesellschaft), which are analogous to public companies in the English-speaking world. An Aktiengesellschaft differs from a Gesellschaft mit beschränkter Haftung (GmbH), which is analogous to limited liability companies in other countries. A GmbH is regulated under the Gesetz betreffend die Gesellschaften mit beschränkter Haftung of 1892 (GmbH-Gesetz; literally "law concerning companies with limited liability").
Three different kinds of concern are identified under Aktiengesetz: the contractual concern, the factual concern, and the flat concern.
In this form of concern, the controlling enterprise and controlled enterprise enter into a control agreement – wherein the controlling enterprise can obtain management powers over the controlled enterprise, sometimes amounting to complete control – and/or a profit transfer agreement. These powers may be used in a way that is detrimental to the subsidiary, provided that they are in the interests of the concern and do not damage the legal separateness of the subsidiary.
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Concern (business)
A concern (German: Konzern [kɔnˈtsɛʁn] ⓘ) is a type of business group common in Europe, particularly in Germany. It results from the merger of several legally independent companies into a single economic entity under unified management.
A concern consists of a controlling enterprise and one or more controlled enterprises. The relationship between the controlling and controlled enterprises is based on the actual commercial and management relationships, unlike parent and subsidiary companies which are related by share ownership and voting rights.
Outside of professionals, the term Group, also mistakenly within the meaning of large companies – regardless of its corporate structure – is understood.
The Group concept has antitrust relevance: the so-called Group privilege, the privilege of the consolidated Group companies involved, means that in itself, prohibition included practices that do not violate German or European Commission (EC) antitrust law. On the other hand, the Group concept in the Banking Act is to the formation of a borrower unit to access large credit facilities.
The 1965 Aktiengesetz, literally "stock law", but commonly known in English as the German Stock Corporation Act, defines a concern as: "one dominant and one or more dependent companies, together under the unified leadership of the ruling company".
The Aktiengesetz applies only to any Aktiengesellschaften (AG; literally "stock company"; singular Aktiengesellschaft), which are analogous to public companies in the English-speaking world. An Aktiengesellschaft differs from a Gesellschaft mit beschränkter Haftung (GmbH), which is analogous to limited liability companies in other countries. A GmbH is regulated under the Gesetz betreffend die Gesellschaften mit beschränkter Haftung of 1892 (GmbH-Gesetz; literally "law concerning companies with limited liability").
Three different kinds of concern are identified under Aktiengesetz: the contractual concern, the factual concern, and the flat concern.
In this form of concern, the controlling enterprise and controlled enterprise enter into a control agreement – wherein the controlling enterprise can obtain management powers over the controlled enterprise, sometimes amounting to complete control – and/or a profit transfer agreement. These powers may be used in a way that is detrimental to the subsidiary, provided that they are in the interests of the concern and do not damage the legal separateness of the subsidiary.