ECONOMIC AND LEGAL RESPONSIBILITY OF HOLDING PARTICIPANTS

Abstract

Purpose: to investigate the grounds and conditions for applying the economic and legal liability of the holding members and to develop proposals for legislative regulation of this liability. Results: it is established that the holding company and corporate enterprises bear separate economic and legal liability, except when the holding company bears joint and several liability for the obligations of the corporate enterprises. It is proposed and justified that the holding company assumes a subsidiary liability for a breach of a corporate entity, which means that to discharge the holding company must prove that its decisions, actions or omissions did not affect the recognition of the corporate enterprise by bankruptcy or breach of its economic obligation or rules of economic activity. Discussion: in the doctrine of commercial law, economic and legal liability has been sufficiently developed. In the modern adapted to market relations, its definition of economic and legal responsibility can be represented as suffering (bearing) voluntarily or compulsorily by participants of economic relations adverse economic consequences stipulated by economic legislation, agreements, local regulations of economic entities, for their committed offense. Conclusions: the holding company and the corporate enterprises bear sole economic and legal liability, except when the holding company bears joint and several liability for the corporate enterprises’ obligations. The holding company shall be jointly and severally liable with the corporate enterprises for the obligations of the latter in the cases provided for by law or contract.

The grounds for subsidiary economic and legal liability of a holding company are proposed to be considered as: 1) non-fulfillment or improper fulfillment of obligations by a corporate enterprise, violation of rules for conducting business activities; 2) insolvency and bankruptcy of a corporate enterprise. The condition of economic and legal liability of a holding company for violation of a corporate enterprise is offered to recognize the fact of abuse of a holding company by the right to manage the economic activity of a corporate enterprise. This proposes and substantiates the presumption of subsidiary liability of a holding company for breach of a corporate enterprise, which means that to discharge the holding company must prove that its decisions, actions or omissions did not affect the recognition of the corporate enterprise by bankruptcy or breach of its economic obligations or the rules of doing business.