In modern economy, corporations are global phenomenons with cross-boarder alliances.
When one thinks of corporations, terms such as size, power and influencec come to your mind. But al lot of people do not know that corporations already arise when a dominant and a dependent enterprise are connected, mostly in terms of parent and subsidiary companies.
If companies are legally independent, but are connected on the basis of certain corporate instruments, companies have to observe the special rules for corporations.
The central characteristic to define a corporation is the centralization of legally independent companies under a unified management.
A certain size of the company is not necessary.
Therefore even small and medium-sized businesses can build corporations. The appearance of corporations ranges from small-sized companies in the hands of only one or fewer shareholders to huge global equity groups.
For companies limited by shares the rules for corporations are very important, because 90% of german stock companies are consolidated.
Business benefits of corporations like positive synergy effects are a result of the sum or the balance of corporate associations.
Positive effects are as well clear and concise management structures and advanced flexibility in comparison to individual, smaller companies.
The legislature has definded the legal regulations concerning the corporations in the law on stock companies.
In addition, questions on corporate law, tax law, financial law with specific specific requirements for the consolidated financial statements and management reports, trade law and public law are introduced when you deal with corporations.