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Ask the Tutor ACCA LW

Parent company and subsidiary company

CCindy7y ago
Is the parent company liable for the liabilities/accountabilities of its subsidiary company, even if the subsidiary company is in a different country?
MikeLittleMikeLittleTutor7y ago#1
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
CCindy7y ago#2
Thanks very much. When can separate legal entity cannot be applied?
MikeLittleMikeLittleTutor7y ago#3
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?
CCindy7y ago#4
Thanks, again.
MikeLittleMikeLittleTutor7y ago#5
Again, you're welcome
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