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28-651: OTO Melara was a subsidiary of the Italian company Finmeccanica , today Leonardo , active in the defence sector, with factories in Brescia and La Spezia . From 1 January 2016, the activities of OTO Melara merged into Leonardo's Defence Systems Division, within the Electronics, Defence and Security Systems Sector. It was founded in 1905 as a joint venture of Vickers and Terni Steelworks , Cantiere navale fratelli Orlando and Cantieri navali Odero . Investment

56-405: A corporate , although this term can also apply to cooperating companies and their subsidiaries with varying degrees of shared ownership. A parent company does not have to be the larger or "more powerful" entity; it is possible for the parent company to be smaller than a subsidiary, such as DanJaq , a closely held family company, which controls Eon Productions , the large corporation which manages

84-408: A business group is a network of firms that regularly collaborate over a long time period. Granovetter argues that business groups refers to an intermediate level of binding, excluding on the one hand a set of firms bound merely by short-term alliances and on the other a set of firms legally consolidated into a single unit. Williamson claims that business groups lie between markets and hierarchies; this

112-642: A company (usually with limited liability ) and may be a government-owned or state-owned enterprise . They are a common feature of modern business life, and most multinational corporations organize their operations in this way. Examples of holding companies are Berkshire Hathaway , Jefferies Financial Group , The Walt Disney Company , Warner Bros. Discovery , or Citigroup ; more focused companies include IBM , Xerox , and Microsoft . These, and others, organize their businesses into national and functional subsidiaries, often with multiple levels of subsidiaries. Subsidiaries are separate, distinct legal entities for

140-487: A definition that provides that "control" is "the capacity of an entity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of another entity so as to enable that other entity to operate with it in pursuing the objectives of the controlling entity". This definition was adapted in the Australian Corporations Act 2001 : s 50AA. Furthermore, it can be

168-412: A group is as a cluster of legally distinct firms with a managerial relationship. The relationship between the firms in a group may be formal or informal. A keiretsu is one type of business group. A concern is another. Douma and Schreuder (2013) distinguish "horizontal" and "vertical business groups" as follows: 'Business groups can be horizontal or vertical as far as their structure is concerned. In

196-414: A group is frequently used in tax law , accounting and (less frequently) company law to attribute the rights and duties of one member of the group to another or the whole. If the corporations are engaged in entirely different businesses, the group is called a conglomerate . The forming of corporate groups usually involves consolidation via mergers and acquisitions , although the group concept focuses on

224-592: A horizontal business group there is no central holding company – the group companies are connected through various formal or informal ties, including reciprocal shareholding. Thus, a horizontal business group is a rather loose confederation of firms. Coordination between them is achieved mainly by mutual adjustment and standardization of norms. Mitsubishi is a well-known example of a horizontal business group as are many other keiretsu . Chinese groups exhibit similar features. Horizontal business groups are also referred to as "associative business groups". A vertical business group

252-404: A joint arrangement (joint operation or joint venture) over which two or more parties have joint control (IFRS 11 para 4). Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The Companies Act 2006 contains two definitions: one of "subsidiary" and

280-432: A judgment against the parent if they can pierce the corporate veil and prove that the parent and subsidiary are mere alter egos of one another. Thus any copyrights, trademarks, and patents remain with the subsidiary until the parent shuts down the subsidiary. Ownership of a subsidiary is usually achieved by owning a majority of its shares . This gives the parent the necessary votes to elect their nominees as directors of

308-462: A subsidiary undertaking, if: The broader definition of "subsidiary undertaking" is applied to the accounting provisions of the Companies Act 2006, while the definition of "subsidiary" is used for general purposes. In Oceania , the accounting standards defined the circumstances in which one entity controls another. In doing so, they largely abandoned the legal control concepts in favour of

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336-456: A useful part of the company that allows every head of the company to apply new projects and latest rules. Corporate group A corporate group , company group or business group , also formally known as a group of companies , is a collection of parent and subsidiary corporations that function as a single economic entity through a common source of control. These types of groups are often managed by an account manager. The concept of

364-655: Is a group of companies controlled, but not entirely owned, by a single investor. Vertical groups are often organized as pyramids of companies controlled by the main investor through a holding company. A unique feature of pyramidal holdings is that it allows the main investor to exert control with a limited amount of capital. Korean chaebols , Indian business houses and most European business groups are vertical in character. Vertical business groups are also referred to as "hierarchical business groups". Encarnation refers to Indian business houses, emphasizing multiple forms of ties among group members. Powell and Smith-Doerr state that

392-1002: Is a subsidiary/child company of the ultimate parent company, while a second-tier subsidiary is a subsidiary of a first-tier subsidiary: a "grandchild" of the main parent company. Consequently, a third-tier subsidiary is a subsidiary of a second-tier subsidiary—a "great-grandchild" of the main parent company. The ownership structure of the small British specialist company Ford Component Sales, which sells Ford components to specialist car manufacturers and OEM manufacturers, such as Morgan Motor Company and Caterham Cars , illustrates how multiple levels of subsidiaries are used in large corporations: The word "control" and its derivatives (subsidiary and parent) may have different meanings in different contexts. These concepts may have different meanings in various areas of law (e.g. corporate law , competition law , capital markets law ) or in accounting . For example, if Company A purchases shares in Company B, it

420-497: Is possible that the transaction is not subject to merger control (because Company A had been deemed to already control Company B before the share purchase, under competition law rules), but at the same time Company A may be required to start consolidating Company B into its financial statements under the relevant accounting rules (because it had been treated as a joint venture before the purchase for accounting purposes). Control can be direct (e.g., an ultimate parent company controls

448-470: The James Bond franchise. Conversely, the parent may be larger than some or all of its subsidiaries (if it has more than one), as the relationship is defined by control of ownership shares, not the number of employees. The parent and the subsidiary do not necessarily have to operate in the same locations or operate the same businesses. Not only is it possible that they could conceivably be competitors in

476-484: The assets of related companies may be pooled to pay the creditors if one of the companies is liquidated. However, the circumstances in which this power will be exercised are very narrow. Leff defines "business group" as a group of companies that does business in different markets under common administrative or financial control whose members are linked by relations of interpersonal trust on the basis of similar personal ethnic or commercial background. One method of defining

504-453: The first-tier subsidiary directly) or indirect (e.g., an ultimate parent company controls second and lower tiers of subsidiaries indirectly, through first-tier subsidiaries). Recital 31 of Directive 2013/34/EU stipulates that control should be based on holding a majority of voting rights, but control may also exist where there are agreements with fellow shareholders or members. In certain circumstances, control may be effectively exercised where

532-409: The instances in which the merged and acquired corporate entities remain in existence rather than the instances in which they are dissolved by the parent. The group may be owned by a holding company which may have no actual operations. A corporate group is composed of companies. The general rule is that a company is a separate legal entity from its shareholders, that is the shareholder's liability for

560-474: The last decade the company has produced between 900 and 1000 GBU-31 and GBU-32 JDAMs on license. At the moment it is working on the production of 500 GBU-39s for the Aeronautica Militare . The naval defence operations produce a wide range of automatic naval artillery, rocket and missile launchers and remote controlled small calibre defence cannons. Subsidiary The subsidiary can be

588-555: The marketplace, but such arrangements happen frequently at the end of a hostile takeover or voluntary merger. Also, because a parent company and a subsidiary are separate entities, it is entirely possible for one of them to be involved in legal proceedings, bankruptcy, tax delinquency, indictment or under investigation while the other is not. In descriptions of larger corporate structures, the terms "first-tier subsidiary", "second-tier subsidiary", "third-tier subsidiary", etc. describe multiple levels of subsidiaries. A first-tier subsidiary

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616-482: The other "subsidiary undertaking". According to s.1159 of the Act, a company is a "subsidiary" of another company, its "holding company", if that other company: The second definition is broader. According to s.1162 of the Companies Act 2006, an undertaking is a parent undertaking in relation to another undertaking, a subsidiary undertaking, if: An undertaking is also a parent undertaking in relation to another undertaking,

644-471: The parent holds a minority or none of the shares in the subsidiary. According to Article 22 of the directive 2013/34/EU an undertaking is a parent if it: Additionally, control may arise when: Under the international accounting standards adopted by the EU a company is deemed to control another company only if it has all the following: A subsidiary can have only one parent; otherwise, the subsidiary is, in fact,

672-560: The production of weapons. On 1 December 2001, the naval artillery division of OTO Melara merged with that of Breda Meccanica Bresciana to form Otobreda . The combined entity produces the DARDO CIWS, Otobreda 76 mm and Otobreda 127/54 Compact naval guns. OTO Melara's land defence operations are part of the Leonardo conglomerate. Vehicles manufactured include: Weapons manufactured includes: Ammunition manufactured include: In

700-430: The purposes of taxation , regulation and liability . For this reason, they differ from divisions which are businesses fully integrated within the main company, and not legally or otherwise distinct from it. In other words, a subsidiary can sue and be sued separately from its parent and its obligations will not normally be the obligations of its parent. However, creditors of an insolvent subsidiary may be able to obtain

728-402: The subsidiary's debts is limited to the value of the shares, and the shareholders cannot be required to perform the company's obligations. However, some jurisdictions create exceptions to this rule. For example, Germany has created affiliated enterprise law which provides situations in which one company is liable for the debts of another company. In New Zealand, the Companies Act provides that

756-460: The subsidiary, and so exercise control. This gives rise to the common presumption that 50% plus one share is enough to create a subsidiary. There are, however, other ways that control can come about, and the exact rules both as to what control is needed, and how it is achieved, can be complex (see below). A subsidiary may itself have subsidiaries, and these, in turn, may have subsidiaries of their own. A parent and all its subsidiaries together are called

784-471: Was also provided by Giuseppe Orlando and Attilio Odero. During World War I , Vickers Terni produced many weapons with calibre 40 mm and upwards. In 1929 the company was renamed Odero Terni Orlando with the abbreviation OTO . During World War II , mostly heavy guns for battleships were produced. In 1953 the company took the name OTO Melara. Before Italy joined NATO , OTO Melara produced civil products, like tractors and looms, but quickly returned to

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