Corporate group

About: Corporate group is a research topic. Over the lifetime, 1747 publications have been published within this topic receiving 46868 citations.

Neutrality as Tax Justice: The Case of Common Consolidated Corporate Tax Base under the EU Law

Abstract: The tax neutrality principle was defined as a tax system not influencing the taxpayers’ business decisions. Economists usually use ‘the no tax world’ as the baseline to decide if a specific tax measure is ‘neutral. If a taxpayer’s reaction to a specific tax is the same as if there is no such tax, then it is neutral. Such formulation of tax neutrality is inappropriate to evaluate taxation in a regional market as European Union. This paper establishes a new normative framework for evaluating the EU corporate tax law reform project, the Common Consolidated Corporate Tax Base (CCCTB) Proposal, that aims to properly tax MNE taxpayers’ cross-border income by a pre-decided formula. The tax neutrality principle should be not be based on the no-tax baseline but interpreted as ‘faithfully reflecting the taxpayers’ economic activities throughout EU’. EU Member States should maintain proper fiscal autonomy to decide their actual administration inputs (the public benefit provided) and their own method to implement the EU level corporate group taxation (the subsidiarity principle). This trio-formulated neutrality concept falls between Rawls’ liberalism theory and Nozick’s libertarianism theory, closer to Liam Murphy and Thomas Nagel’s tax justice theory. Such trio-combination also better regulates the interactions of the three actors in the EU internal market: EU, Member States and MNE taxpayers. This reformed neutrality is a more appropriate norm than one single economic or legal principle for the EU corporate tax reform.

The new corporate law

Abstract: Corporate social responsibility is back on the corporate law reform agenda. From an Australian perspective, the evidence for this is found in the simultaneous but separate inquiries that, at the time of writing this paper, are being conducted into this topic by the Australian Parliament’s Joint Committee on Corporations and Financial Services, and by the Australian Government’s Corporations and Markets Advisory Committee (CAMAC). These developments are supported by the many standards, guidelines, principles, and codes promulgated by non-government bodies, industry groups and other international organisations. Cynics might dismiss these developments as part of a regular cycle of corporate law reform. After all, as we will see, this is not the first time that corporate social responsibility has appeared on the reform agenda. Others might suggest that, finally, this is an idea whose time has come. The purpose of this paper by Stephen Bottomley and Anthony Forsyth is to examine the extent to which this renewed, and widespread, attention to corporate social responsibility is being reflected in the substance of our systems of corporate law. Is it possible, and meaningful, to talk of a ‘new corporate law’ in which the concerns of people other than shareholders (or, indeed, the non-financial concerns of shareholders) are to be given serious attention?

Rethinking Corporate Law and Economics in a Theory of Private Benefits of Control

Abstract: The standard approach to the legal foundations of corporate governance is based on the 'law matters' thesis, according to which corporate law promotes separation of ownership and control by protecting minority shareholders from expropriation. This paper takes a broader perspective on the economic and legal determinants of corporate governance. It shows that protection and exchange of corporate control is at least as important as investor protection, and so are the legal institutions that support them. This result is derived by defining a third category of 'idiosyncratic' private benefits of control, which supplements the more traditional specifications as inefficient consumption of control perquisites ('distortionary' private benefits) or outright expropriation of shareholder value ('diversionary' private benefits).The proposed framework departs from the standard principal-agent models in that it assumes that private benefits of control also account for a further value to be appropriated as reward to entrepreneurship in the corporate structure. The quasi-rent nature of this value makes appropriation by corporate controllers a necessary condition for efficiency ex ante, which implies that residual control rights be allocated separately from ownership. Under a number of reasonable assumptions, a constrained-efficient outcome is derived ex post as Coasian bargain between the incumbent and the insurgent over the value of corporate control.This result has a number of implications for corporate law. When legal institutions effectively constrain expropriation of non-controlling shareholders, they may still distort separation of ownership and control by making ownership structures either more concentrated or more dispersed than it would be efficient. This happens when corporate law fails to provide those who run the company with entitlements to uncontested control independently of how much ownership they retain. Likewise, regulation may undermine the takeover process when it restricts side payments that ultimately support efficient bargaining upon the value of corporate control.

Corporate Groups: Competences of the Shareholders Meeting and Minority Protection. the German Federal Court of Justices recent Gelatine and Macrotron Cases Redefine the Holzmüller Doctrine

Abstract: There are few cases in the law of corporate groups that have provoked as much interest, applause and critique as the Holzmuller decision of the Federal Supreme Court. On February 25, 1982, the 2nd Zivilsenat (Chamber of civil cases) of the Bundesgerichtshof (BGH – Federal Court of Justice), the highest court with assigned competences for company law, adopted what would later be known as the Holzmuller doctrine. Since then the Holzmuller case has influenced the course of countless shareholders’ meetings, been relied on in numerous shareholder actions and has initiated intensive academical as well as practical debate. What is it all about? At the core, Holzmuller deals with the balance of power between the Hauptversammlung (shareholders’ meeting) and the Vorstand (board of directors) of a German Aktiengesellschaft (AG – stock corporation) within the context of corporate groups. Practically, the protection of minority shareholders of a corporate group's parent company is a major underlying issue.