The Legal Basis for a Holding Company's Liability for Its Subsidiary's Debt: Comparative Analysis of the UAE and the Egyptian Legal Systems

Document Type

Article

Source of Publication

Journal of Legal, Ethical and Regulatory Issues

Publication Date

4-1-2021

Abstract

Rapid changes have tested and will continue to test the limits of liability in tort law. To date, much pressure has been applied to the principles governing the liability of a holding company since the doctrine of veil piercing has fallen out of favor with many courts. This article studies the legal basis of the holding's liability for its subsidiary's debts in the light of two contradicting principles: The ‘legal independence' and the ‘economic dependence' of the subsidiary. The study concludes that it makes no sense to make the holding company carry out full custody of its subsidiaries, but meanwhile, parties injured by subsidiaries can make a claim on the holding if a direct duty of care has been breached. Therefore, much wisdom is needed to estimate the civil responsibility of the holding company. Thus, this article analyses the court decisions, laws, and policy considerations governing a holding company's liability in the UAE and Egypt.

ISSN

1544-0036

Volume

24

Issue

2

Last Page

14

Disciplines

Business | Law

Keywords

Corporate Law, Group Company, Holding Company, Liability, Subsidiary Company

Scopus ID

85105175726

Indexed in Scopus

yes

Open Access

yes

Open Access Type

Bronze: This publication is openly available on the publisher’s website but without an open license

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