‘To Link or not to Link?’ The Problem of the Multinational Enterprise Group Business Structure
Although enterprise groups are usually comprised of a bundle of separate legal entities, the traditional company law concepts of separate personality and limited liability might not match the economic reality of how groups operate. The question is therefore whether in dealing with group issues entity separateness should be kept for all purposes (adopting ‘entity law’) or whether in some circumstances ‘enterprise law’ should prevail, linking between the group members. This chapter overviews group problems as might arise in different areas of the law. It then considers the opposing views of entity and enterprise law proponents, appreciating the economic essence of legal separateness but also its limitations in the group context. It examines legal regimes' approaches to the group problem. It concludes by suggesting that the law should seek to balance between entity and enterprise law when proposing group solutions taking into account the objectives of the relevant area of the law and the type of group in hand.
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