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Information Journal Paper

Title

Abuse of parent company from subsidiaries in Iranian law, examples, explanations of responsibilities and solutions

Pages

  285-307

Abstract

 parent company often set up subsidiaries because of the variety of investments, the use of skilled and efficient managers, and the cost savings. In the corporate business group, the parent company may, by resorting to the principle of " Independence of the legal personality of the company ", escape from liability by exploiting the coverage of the legal personality of the subsidiary for its fraudulent purposes. Therefore, it is important to explain the responsibility of the parent company as an exception to the principle of the independence of the legal personality and to identify possible ways of abusing it. The mother company can exploit the subsidiary's legal personality coverage for such purposes as escape from religion, tax evasion, and unfair trading practices such as monopoly competition. Based on this assumption and in the vacuum of special regulations, based on the activity and potential misuse of the group of companies in Iranian law, one can, according to the existing jurisprudential and legal rules, including the rule of " qui sentit commomum sentire debet et onus; he who gains the advantages also must suffer the burden" The, " deceive” , “ liability for ownership or control” , "vicarious liability" and " causing " were responsible for the parent's liability for damages to third parties. In order to prevent potential abusive uses, it is imperative to develop mandatory screening laws, reform of the laws and the tax system, and the establishment of regulatory mechanisms in the corporate group.

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    • Cite

    APA: Copy

    GHOLAMI, JAHANBAKHSH, & Bagherpour, Salman. (2021). Abuse of parent company from subsidiaries in Iranian law, examples, explanations of responsibilities and solutions. THE JUDICIARY’S LAW JOURNAL, 85(113 ), 285-307. SID. https://sid.ir/paper/387106/en

    Vancouver: Copy

    GHOLAMI JAHANBAKHSH, Bagherpour Salman. Abuse of parent company from subsidiaries in Iranian law, examples, explanations of responsibilities and solutions. THE JUDICIARY’S LAW JOURNAL[Internet]. 2021;85(113 ):285-307. Available from: https://sid.ir/paper/387106/en

    IEEE: Copy

    JAHANBAKHSH GHOLAMI, and Salman Bagherpour, “Abuse of parent company from subsidiaries in Iranian law, examples, explanations of responsibilities and solutions,” THE JUDICIARY’S LAW JOURNAL, vol. 85, no. 113 , pp. 285–307, 2021, [Online]. Available: https://sid.ir/paper/387106/en

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