Abstract

The distinction of the notion of a parent company and a subsidiary company (Article 4 § 1 Sec. 4 of the KSH) provides grounds for the extended application of the directives of the code. The rules and restrictions directed at a company refer also to its parent or subsidiary companies. In this way the legislator aims to prevent the evasion of the law by using “related” entities. Doubts are aroused, however, as to the shaping of certain criteria decisive for stating the dominance/subordination relationship. Certain conditions laid down in Article 4 § 1 Sec. 4 of the KSH are difficult to apply in practice, which provokes the undertaking of analysis.