In present times the reasons to found business groups are manifold. Frequently, groups come into being as a result of organizational growth, which for the sake of expediency leads to the foundation of subsidiaries. Apart from that also purposeful expansion and diversification strategies lead to creation of groups or their growth (vertical and/or horizontal expansion as well as lateral expansion or diversification). The structure of the group brings about legal questions concerning for example legal powers and responsibility for financial risks within the group, the problem of hidden capital contributions and post-formation acquisition or liabilities arising from collateralization relations.

By the same token tax law plays a significant role in a group, reaching beyond the individual company as taxable entity (group tax(ation) policy). Last but not least also the financial presentation practice as means of profit and loss control (e.g. instant profit realization, transfer prices) gains special importance.

Economy globalization brings about new problems with regard to international group law.

< back