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Is the economic reality different from the legal reality, or is the latter so inconsistent that the firm and the market are subject to enormous distortions and instrumentalisation? Does it make sense to speak of a group firm, without autonomous legal personality, which is directly liable for (entrepreneurial) responsibility?
In order to answer this question, the starting point can only be the obvious terminological paradox between being subject to the control of others and the autonomy of the same controlled corporate entity.
The control exercised by one company over another is the benchmark used in existing legislation to enshrine the requirement of being subject to the management of others in the making of organisational, commercial and financial decisions. Formally, control can be manifested in various ways, generally referring to the majority of the stakes in the subsidiary, the holding of the majority of the exercisable voting rights, the possibility of determining the composition of the governing bodies, the power to influence in other ways how the decisions are to be taken or, it is noted, through a combination of these elements[i].
The varied forms of corporate control meet a general legal principle, namely that of identifying, first and foremost from a theoretical point of view, the cases in which corporate management by third parties is apparent, thereby establishing an absolute presumption of control, i.e. that of being subject to the management of others, which is considered to be lawful notwithstanding the separate legal personality of the group companies, which, in turn, is based on a diametrically opposed principle, namely that of autonomy.
The legal anomaly of the simultaneous coexistence of autonomy and management by third parties in the same company is even more evident if one investigates the relationship between entrepreneurial and corporate cases. The company is the typical form of business activity, representing the legal form of the production phenomenon from which rights and obligations are derived vis-à-vis third parties, i.e. vis-à-vis the reference market. The company then defines the scope and limits of the allocation of responsibility – and thus of risk – in the firm.
[i] For everything, see, René Reich-Graefe, Relational Networks and Enterprise Law: Comparative Trends of Network Liability in the United States and Europe, p. 3.