Chapter4 - CG Chapter 4 Complex Corporate Structures Due to...

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CG Chapter 4 Complex Corporate Structures Due to growing globalization and increasing numbers of cross-border companies, firms are nowadays forced to adopt a more complex corporate structure A holding company holds dominant share of voting rights in another company In a subsidary company another (holding) company holds all/most of ist voring shares Over an associate company another company exercises dominant power, without holding a majority of vorting rights in that company The Governance of Pyramid Structures Found most frequently Widely used by international groups which own companies in several countries One holding company, several subsidiaries companies, several levels Cross-border holdings of companies make structures even more complex (more levels) Advantages Strategic positioning Simplifies legal and regulatory aspects Tax benefits Reduce group’s exposure to debt of any member company (limited liability) Preserve a name or provide legal home for non-trading activity The Governance of Chain Structures Group of companies in an ownership chain Companies in chain have other outside shareholders (different in pyramid structure) Found in Asia, Europe Advantages Leverage power gained from gearing Head of the chain can exercise more influence over companies in each chain (than by
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Chapter4 - CG Chapter 4 Complex Corporate Structures Due to...

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