Companies within the Same Group Free Essay Example, 4250 words

Business legal structures are crucial in determining how particular business entities carry out their activities. Companies within the same group tend to carry out their activities in similar ways. Most businesses use a group of companies as the medium through which they carry out their activities. Businesses use this medium because it enables them to comply with legal requirements within specific jurisdictions. For example, a business may open a new business abroad and conduct it through a subsidiary in order to comply with the legal requirements of those particular countries. Additionally, there may be other advantages that arise as a result of conducting business through a group of companies. Tax advantages and reduced risk exposure are the most notable advantages that benefit the parent company in the long- run. Based on Salomon entity concept, English law continues to treat all companies within the same group as separate legal entities, thus implying that these companies are n ot their controlling shareholders agents. It should be noted that companies within the same group are arranged in such a manner that they have separate liabilities for the group s diverse activities. We will write a custom essay sample on Companies within the Same Group or any topic specifically for you Only $17.96 $11.86/page Strict use of Salomon approach in the English company law may be inappropriate in the modern business world where the economic connection between companies within the same group is increasing and becoming inextricably linked.