Ownership and Governance of Business Groups - Discussions in Germany and Europe -

The current debate on corporate groups in Germany and Europe focuses on the protective provisions for the subsidiary’s minority shareholders and creditors as well as on the organization and management of a corporate group. After introducing the general principles and reviewing empirical data, this paper discusses the structure and current issues of German corporate group law including groups by contract and de facto groups. In general, this area of law does not cause any special difficulties. However, some weaknesses, such as contractual groups with a GmbH as a subsidiary and the secrecy of the dependency report in de facto groups have remained. They are to be addressed by the law maker. Recent developments on the European level recognize both major problems of group law: The proposed regulation on related party transactions focuses mainly on the protection of outside shareholders’ interests, whereas the SUP project shall serve the enabling of efficient group structures, although an overriding group interest is not recognized so far. This piecemeal approach of the current EU regulation is second best choice compared to a set of elaborate provisions addressing in‐depth the enabling and protective function of corporate group law.