Corporate Groups:

Many corporations have a high level of complexity and intricacy.  Within any corporate structure there may be range of different entities such as the head company, subsidiaries, foreign branches, retail companies, holding companies and trusts. The reasons for this may be driven by many factors such as tax minimisation, asset protection, diversification of risk and entry into different markets.  An experienced Corporate Lawyer can have regard to the issues in your matter and may advise, recommend and devise a corporate group that fulfils all of your needs. Even before you start your business and even if you think your business structure is small or simple, it may be useful to obtain preliminary legal advice to optimise your profits and protect against business risks.

A corporate group can be a collection of parent and subsidiary corporations that function as a single economic entity through a common source of control.  A corporate group may function with vertical integration or horizontal integration.  In contrast, it may function with corporations that are in entirely different areas of industry and this is referred to as a conglomerate.  There are different objectives and advantages of each.

Another type of corporate group is a collection of corporations that collaborate as a network over a long period of time.  The level of binding may be informal or formal, crystallised through partnership agreements, short term alliances or joint ventures.  These operate on a flatter structure in contrast to the hierarchal structure that exists between parent companies and subsidiaries.  Legal advice may be required in order to ascertain whether or not you require a flatter or more hierarchal corporate group structure.

Many corporate groups have a head company that has ownership of the other companies, by owning the shares in the other companies or a controlling interest. Of course, depending on the type of corporate group this level of control may be formal or informal. This holding company might have centralised control and management of the other subsidiary corporations.  The type of control by the head company may administrative, financial or both.  Due the complexity and sophistication required of different corporate groups to achieve your specific needs, it may be beneficial to retain a pivate clients solicitor who may be able to consider your factual matrix and advise you of all the costs and benefits of certain corporate groups.

Many corporate groups have holding companies that simply own certain assets.  Corporate structuring is important as it facilitates a level of flexibility that is required for the mobility and transferability of certain assets within that corporate group.  Legal advice from a qualified Corporate Lawyer can be immensely useful and informative in this regard.

Furthermore corporate groups will often have subsidiaries, which are companies controlled or owned by a holding company.  A holding company is a company that owns the majority of the shares in another company.  There is an obligation for the parent and subsidiary to act in good faith and to deal fairly with each other.  Consultation with an experience corporate lawyer can assist you in ensuring that you have the optimal corporate structure to suit your needs and purposes.

If you need further legal advice on your matter, you may book an appointment with us by calling 02 9233 4048 or sending an email to info@navado.com. 

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