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What is common group entities & what are their legal standing?

August 17, 2020

Any company, llp, firm or any other entity if owned and managed by same group of people, then it is usually a common group entities. Commercially such common group entities enjoys the benefits of pulling of resources, economy of scale, sharing of knowledge, technology & resources & flexi inter entity fund management. Reputation & Branding of group also extends benefits to each group entity.

Transaction & dealings between group entities is regulated by Companies Act, LLP Act, Securities Laws, Listing regulations. All laws have different parameters & thresholds.  Direct or Indirect Control on ownership & Management are the fundamentals. Good governance norms expects promoters/ managers to follow fairness & transparency in transaction between group entities.  Market Price & Arm’s Length are deciding factors for the group entity transactions.

Creation & management of vertical or horizontal group entity structure, regulation of inter entity dealings, compliances & disclosures are some of the key areas needs professional care & support. Bizfirst Smart Team has excellent knowledgebase & experience to extend professional advice & support on Group entity matters. To know more connect to our Biz Smart Executive