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Parent company and subsidiary company

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Parent company and subsidiary company

  • This topic has 5 replies, 2 voices, and was last updated 6 years ago by MikeLittle.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • January 2, 2019 at 10:36 am #499663
    cindy1228
    Participant
    • Topics: 63
    • Replies: 118
    • ☆☆

    Is the parent company liable for the liabilities/accountabilities of its subsidiary company, even if the subsidiary company is in a different country?

    January 2, 2019 at 4:19 pm #499700
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23333
    • ☆☆☆☆☆

    The parent is not liable for the debts and liabilities of the subsidiary, no matter where that subsidiary is located. That’s one of the illustrations of the fundamental principle of separate legal entities

    January 2, 2019 at 11:11 pm #499727
    cindy1228
    Participant
    • Topics: 63
    • Replies: 118
    • ☆☆

    Thanks very much. When can separate legal entity cannot be applied?

    January 3, 2019 at 4:17 am #499741
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23333
    • ☆☆☆☆☆

    There are examples in the notes that include …

    … a sham company (Gilford Motor Company v Horne)
    … trading with the enemy (Daimler v Continental Tyre & Rubber)
    … a case of corporate manslaughter (R v OLL)

    But the Courts are extremely reluctant to extend this list

    OK?

    January 3, 2019 at 5:11 am #499744
    cindy1228
    Participant
    • Topics: 63
    • Replies: 118
    • ☆☆

    Thanks, again.

    January 3, 2019 at 12:17 pm #499803
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23333
    • ☆☆☆☆☆

    Again, you’re welcome

  • Author
    Posts
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