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LIABILITY OF PARENT CORPORATIONS, OFFICERS, DIRECTORS, AND SUCCESSORS: When Can CERCLA Liability Extend Beyond the Company? Michelle De Blasi* INTRODUCTION The high cost of remediating contaminated.

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A holding company is a type of financial organization that owns a controlling interest in other companies, which are called subsidiaries. The parent corporation can control the subsidiary's policies and oversee management decisions but doesn't run day-to-day operations.

And because the holding company itself, and not its owners, creates and funds the operating company, the holding company is liable for the operating company's debts, but only up to the amount it has invested, if it is in a business form that offers limited liability, such as the limited liability company (LLC).

Holding companies can offer a number of advantages, including the ability to operate your business and ensure that your family receives the income from your business. However, holding companies also have a number of disadvantages, including limited liability protection and high costs.

The holding company members will also enjoy the protection of limited liability. Since the holding company is the true owner of all of the operating company's assets and most of its cash, the company has additional protection from debts and creditors.

Parent companies work by controlling over 51% of another company's stock, giving it the majority control over the subsidiary's operations. The parent company can choose to change the current direction and method of operations of a subsidiary, or it can simply choose to act as a hands-off 'manager'.

Basic Legal Rule: Limited Liability In most cases, the parent company is not liable for the subsidiaries' actions. This basic level of liability protection is what has led to so many companies establishing a parent-subsidiary relationship.

Though the law in each state may differ, the general principle of corporate law in the United States federal courts1 is that “a parent corporation . . . is not liable for the acts of its subsidiaries.”

Setting up a family personal holding company lets you keep control of your assets while transferring ownership of most of them out of your name. This is how it works, you establish a corporation giving yourself a relative majority of the stock and dividing the rest among the family members.

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Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232