Concern (business)

This article incorporates information from the German Wikipedia.

A concern (German: Konzern) is a German type of business group. It results from the merger of several legally independent companies an economic entity under unified management. These associated companies called "Group" companies.

A Group consists of a parent company and one or more subsidiaries. A special form of organisation of Groups, the Holding Organisation.

Outside of professionals, the term Group, also mistakenly within the meaning of large companies – regardless of its corporate structure – is understood.

The Group concept is one of anti-trust relevance: the so-called Group privilege, the privilege of the consolidated Group companies involved, means that in itself, prohibition included practices did not violate German or European Commission (EC) anti-trust law. On the other hand, the group concept in Banking Act in the formation of borrower unit and particularly of the large credit limits of paramount importance.

The legal Group – term

The German Stock Corporation Act defines the Group as follows: "If one dominant and one or more dependent companies under the unified leadership of the ruling company together, they form a Group and the individual companies are affiliated companies" (Section 18).

The key essence of the Group is the summary of legally independent companies under a single management. The single line is a vague legal concept, in which the legislators aware of a specific waived. After prevailing opinion is the single line if a company other company actually controlled. After the position of Group companies differs further in the law equal regulatory concerns and subordination Groups.

Equal planning Groups

Characteristic of equal Atomic Group is the equal status of the Group. There is, in this case, there is no dominant companies, but the governing bodies are in mutual adjustment contract. This may take the form of an advisory board or a human interdependence of the management of participating companies.

Subordination Groups

In practice more often is the form of subordination Group. These companies dependent under the direction of a single dominant company. A dependence of the subordinate enterprises occurs when the dominant companies to directly or indirectly exert a dominant influence, although this power must not be exercised, but it is sufficient if only the opportunity to do so.

There are further three forms of subordination group, each with varying degree of integration:

Integration Group

Integration is the most intense form of the Group. It occurs when a corporation to another domestic 'Aktiengesellschaft' (AG) is taken. The Company reserves here after its independence in foreign, interior to act but as an operating division. Requirement is a majority-owned by at least 95%. In economic terms, the inclusion of a merger, or merger very close.

Contracting Group

A contractor will be consolidated by a controlling agreement Sid Section 291 founded. A controlling agreement entitles the dominant company, the chairman of the dependent company with regard to the management of the company to issue. This deposit law is comprehensive and is thus detrimental for instructions, unless they contradict the consolidated interest or constitutes a threat to the existence dependent companies dare. Precondition for the conclusion of the contract is a three-quarter majority in the General Assembly of both companies. The comprehensive legal remittance companies obtained the legal ruling the full management of the business dependent society.

Fauktischer Group

If neither control nor a contract inclusion, we speak under the following conditions of a proper group: There is a dependency ratio meaning of Section 17, the dependent company is a corporation (AG, Inc, Ltd., a corresponding application of section 17 on partnerships is already there because of the prevailing principle of unanimous decision-making on basic business management measures hardly possible) and the dominant company has the possibility to influence the dependent companies. Basis for the influence of the dominant company in principle constitutes a majority stake, which means the capital and / or majority. This influence may however not be used, the dependent society to a negative business for them to comply unless the disadvantages are balanced. This disadvantage, however, is compensatory in practice both the nature and the extent to difficult.

Business Group forms

Another distinctive feature of the different structure groups. There are many types of these weird and small business group that form.

Vertical Group

As a Group called vertical corporations, the upstream and downstream stages of the actual value and power generation include a broad spectrum of the service providing cover themselves and not by outside companies. Example would be a corporate group European Coal and Steel Community, both coal and iron ore and steel degrades produced and possibly also marketed.

However, this Group now form part outdated – it is in modern economic often seen as uneconomical. Materials for processing, supply parts to produce is no longer itself, but buys them in changing suppliers about the best prices. Example of this form of production, Lean Production would be companies in the automotive industry, such as Volkswagen Group.

Conglomerate

(inorganic groups) The conglomerate consists of enterprises in different areas. The individual companies have limited business relationships with each other. As multi-national corporations are also those groups designated locations in several states.

Criticism of corporations

The result of the merger often emerging political power of (wholesale) companies has been criticised for their formation. The critics can be divided into three groups:

1. 'Politics'. Political criticism about the group size are reflected in the European Union competition law and anti-trust laws.
2. 'Church'. The Church's criticism comes as a rule of the Christian (Catholic, Protestant or Orthodox) social teaching (or corporate ethics).
3. 'Society'. Social criticism can be found since the formation of the labour movement, especially in the currents of

• Social democracy
• Marxism

Since the emergence of New Social Movements companies are also in the field of view of:

• Environmental movement and
• Anti-globalization movement (see Black Book brand companies)

advised.

See also

• Consolidated financial statement

Notes

References

 

• Emmerich, Volker / Habersack, Mathias: 'Equity Group Ltd. and legal ", 5 Ed, Munich 2008, ISBN 3-406-55915-8
• Hoffmann, Friedrich (eds): 'Group Guide, Wiesbaden 1993, ISBN 3-409-19953-5
• Herkenroth, Klaus / Hein, Oliver / Labermeier, Alexander / Pache, Sven / Striegel, Andreas / Wieden rock, Matthias: 'group tax law', Gabler Verlag, Wiesbaden 2007, ISBN 978-3-8349-0474-4
• Löding, Thomas / Schulze, Kay Oliver / Sundermann, Jutta: 'group, criticism, campaign! Ideas and practice for social movements.VSA-Verlag, Hamburg 2006, ISBN 3-89965-199-5
• Scheffler, Eberhard:Management Group, 2 Edition, Munich 2005, ISBN 3-8006-3097-4
• Schulte-Zurhausen, Manfred: 'organisation'3 Edition, Vahlen Publisher 2002, ISBN 3-8006-2825-2
• Theisen, Manuel René:The group – legal and economic foundations of the enterprise group "2 Circulation, Schäfer-Poeschel, 2000, ISBN 3-7910-1487-0
• Werner, Klaus:The new Black Book brand companies. The machinations of the corporate world.Ullstein publishing house, new edition 2006, ISBN 3-548-36847-6