Company groups regulation: legal and technological challenges

ENConventionally, company law was aimed at regulating the activities of individual companies. A small number of owners who were mostly related to family or friendship relationships was characteristic of such companies. Generally, such companies would produce or sell one kind of goods and operate on the local geographic market2. However, favourable economic conditions and the right of the company to become a member of another company have determined the emergence of company groups. Until a company was allowed to become a shareholder of another company, neither parent companies, nor subsidiaries were known in company law. On the other hand, despite the fact that company groups are an integral part of modern economy, only a few fragments of this institute have been established in a number of European Union (hereinafter – the EU) countries, including Lithuania. Such legal uncertainties and confusion lead to a gap between legal and economic realities. Company groups are obliged to operate according to the legal norms, which are adapted to the classical concept of a legal entity, but only partly comply with the specifics of company groups. Accordingly, the question arises whether the current legal regulation is appropriate to company groups. Besides, it is important to find out what technological challenges are encountered in the regulation of group activities and how to overcome them. [From the publication]