Business, Management and Accounting
3 years ago

Unlocking Corporate Governance Secrets: How Shareholder Agreements Prevent Expropriation

2 views
SSRN Electronic Journal
Corporate Groups: Corporate Law, Private Contracting and Equal Ownership
María Isabel Sáez Lacave, María Gutiérrez Urtiaga

Paper Summary

The article explains how corporate groups have ownership structures due to the controlling shareholder being both a shareholder and stakeholder of the subsidiary. Regulations and contracts have limitations in dealing with this dual role, leading to extreme ownership structures. Shareholder agreements are crucial in protecting parent and subsidiary from opportunism and reducing expropriation in corporate groups.

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