Corporate Law, How it affects Subsidiaries-Alliances Options

[prettz]

If a Subsidiary company opens an office in a place where its parent corporation is has no presence (whether officially or not) does that subsidiary have an effective corp rating of the parent corporation or is there rating determined by their own status as a corp?

For example: AresArms is a subsidiary of Ares macrotechnology. If AresArms opens a factory/office/whatever in Example City and Ares Macrotechnology has no presence in the city what is AresArms corp rating? Is it considered AAA because it is apart of the bigger Ares family or is it whatever the sub's corp rating would be if it wasn't owned by a larger group.

Taking this one step further, what about corporate alliances and limited partnerships, like the Pacific Prosperity Group (PPG). Do they effect corp ratings of the corporations that are involved in them in any way? Meaning for example can a bunch of A corps band together to apply for AA status under an alliance or limited partnership without losing their independence and requiring to merge into one corp?

[mfb]

hrm. you're talking about the corp rating rules in Corp Shadowfiles and Corp DL, right? i guess you could gen up some houserules for stuff like that, yeah.

[prettz]

Well from the Corporate Download as I don't have the the other other book. I was planning on houseruling it since the decision either way doesn't affect the PC's lives to much, but I wanted to know what the opinions of others were.

[FrostyNSO]

As subsidiary companies are assets of a larger parent corp, I would think the parent corp would protect it's assets as it would protect itself, or risk a loss in the profit column.

As far as the PPG, I wouldn't assume that the corps wouldn't work together to protect the overall profit margin.

[prettz]

Yeah, a parent corp will protect its subsidiary, I'm not questioning that but does the parents rating transfer down. Is every subsidiary of a AAA corp considered extraterritorial because it is a subidiary of a corporation that powerful or must it get the extraterritorial status like every corp?

Exapnding on the above subsidiary example: Instead of AresArms in the example it is a mom and pop store but it offically belongs to Ares. Now this mom and pop store wouldn't even qualify as an A corp but it belongs to a AAA corp. So does the store automatically get extraterritorial status because of who owns it?

As for the PPG, that as probably a bad example. Say three corps are all A corps and they all known that they cannot make AA status. They band together forming an alliance or parthership of sorts and now together they fillfull the requirements to become a AA corp. Can they apply and be granted AA status even though while they meet the requirements together they are actually three independent corparations banded together?

[Backgammon]

Well, I'm not a lawyer, but my take on it is:

Subsidiairies are extra-territorial. Ares Macrotechnology only exists to own stuff. Ares Arms, on the other hand, builds weapons as well as own other companies. A Corporation does not get extraterritoriality, as it is not a physical entity. Facilities (aka sites or physical plants) owned by Ares, on the other hand, are. But only if they are clearly labeled as such. So yes, rating transfers down in that sense.

In your example, that mom and pop store, since it's owned by Ares, can claim extra-territoriality.

Second part: that's tricky, and it starts going into real business law. From what I know, I'd say the 3 companies have to form a formal alliance if you will, by having 1 parent company own all 3. This is easy if they are private companies. If they are public, I have no idea how that would work out. The term "Consotium" also comes to mind, but I'm not sure enough to go any further than that. Basically, there are many tricky legal ways to companies to "merge". Once they can present that one united front, they can present that and ask for AA status. Anyway, a lot of legalities come into effect.

[Nath]

I don't remember the issue being specifically settled anywhere. For instance, a talk in Corporate Download does say Mercury Express, a delivery business owned by Ares, benefits from extraterritoriality, but it does not clearly state that Mercury wouldn't if it wasn't owned by Ares. This is however very likely. So I'd assume extraterritoriality is transitive down the line as long as there's a "half-and-one" ownership (the simple majority of stock required for a company to be counted as a subsidiary).

As for partnerships, a first interesting case is that the "half-and-one" conditions wouldn't be fulfilled if let say Ares and MCT each own only half of a joint venture's stock. Because none of the two can control the joint-venture alone with the vote it has, it cannot be considered as a subsdiary. The same for three or ten companies. Since the criteria for extraterritoriality is stability and wealth, granting the benefits of extraterritoriality to company when at least half and one shares are owned by any number of megacorps wouldn't threaten the system too much.

In the case of A multinationals banding together, theer aren't any mention of conditional grouped extraterritoriality. The Corporate Court grants extraterritoriality nominally to a single corp at a time. If corp A, B and C bands and create the ABC joint-venture (a consortium), each owning a third of the stock. ABC will eventually become big and stable enough to be granted extraterritoriality. Stability depending on its financial backer, which are A, B and C, which we assumed to be together as strong as a AA. But the extraterritoriality will never extend to A, B or C. What they can do however, is to subcontract accounting, production, marketing and everything else to ABC at preferred tariffs with contracts that make sure the two other 'associates' won't be able to end them. All this business in turn, strengthen ABC, and help it to justify its AA status, but they should have merged instead of going into so much organisational trouble. A small part of the benefits of A, B and C business made through ABC will be diluted between ACB stockholders A, B and C, that's all. Oh, and the board of A, B and C won't be protected by extraterritoriality. They can still rent offices to ABC to meet, and get some positions in ABC to justify corporate citizenship. You jsut have to avoid ever using the word "lease" : whatever a mega lease or sell is no longer extraterritorial. Renting, subcontracting, providing... are all okay.

Note that if A owned half-and-one of ABC stock, while B and C only owned a quarter minus something, the Corporate Court could grant A extraterritoriality, which would extend to ABC. But they could also consider the A+ABC wouldn't be stable enough if B and/or C backed off.

Concerning the PPG, it seems to me it's a sort of business club, not an incorporated thingie with stock divided between members. As such it couldn't get extraterritoriality, no matter what.

[BitBasher]

I'm fairly positive that subsidiary as meant in the book is not a separate corporate entity, just a term for the division of a company. Ares Arms is a division of Ares macrotechnology IIRC.

[Vera53]

[toturi]

OK, my take on this as presented in the extraterritorial examples in Corp Download, if Mom and Pop Inc sets up store in Example City, and simply puts on its signage,"Mom and Pop Inc." it is not extraterritorial. But if it puts "Mom and Pop Inc, a member of the Ares Macrotechnology group," it is.

[Kagetenshi]

And Joe Corporate Agent with a sign can make the change in event of a mishap on the property.

~J

[Black Isis]

[prettz]

Stability and wealth make sense as needed factors needed for AA. Wealth is pretty easy but what would you think qualifies as stability? Look at Fuchi, it was a AAA and supposed to be stable but it crumbled, also many AA and even AAA corps could hardly be called stable in that their is as much infighting as their is fighting the other corps.?

I'm probably looking to much into this but I doesn't seem that the books I have cover this.

Also I need to know because of a corp group I'm thinking of developing. The summary of it is that the group known as the TyShinWa Group which is made up of 3 A corps (Tylon Industries, Shinkon Banks, Wayler Shipping) which banded together in the early 2010's to fight off other more powerful corporate interests which threatened them all and to combat the the growing problems in the world. The charter of the group has banded them together ever since but specifically says that each corp will remain independent of the others but to finalize the deal each corp traded 10 percent of its stock to the other two (meaning that each corp owns 5 percent of the other two).

Before the 'joining' as it is referred to as the three were small fish in a big ocean, however since the 'joining' the profits and power of each corp has expanded greatly. Separately each corp can claim powerful A status (nearly going on to AA status) but not quite yet and that is the problem. Because of its location and its rise to power, other more powerful corps have taken an active interest in the group and TyShinWa is finding it under 'government' pressure to do business in countries owned by corps that want a piece of it. To attempt to override the these governmental problems the TyShinWa has applied for AA status. The question is can they get it?

Now there were two conditions I've seen as requirements are wealth and stability. Wealth wise the group has got it as each individual corp is almost (and almost is the problem for them) powerful enough to apply for AA status. Stability is the next condition and that is hard to define. Each corp in the group fights amoung the others but nothing to the point of the major corporate infighting that some of the AAA's have mainly because the corps don't want to affect their profits and status but right now they need to band to together to fight off invaders.

As to why they didn't merge, each corp is still controlled by the family that made them with, with controlling interest laying at the feet on one heir who owns 50-55 percent of the corp (depending on which one in question). Each CEO and chairman(or woman in the case of Tylon Industries) is an independent thinking person and they don't wish to merge believing that merge will erode their powerbase in the new corp or something along those lines.

[prettz]

Black Isis
"I'm not sure how AresArms is related to Ares Macrotech, but I thought it was a division."

It's a major Subsidiary of Are Macrotech. Divisons of the AAA's (at least) are divided by continent (sp?). Like Ares North America, or Renraku europe and the such if memory serves.

[Kagetenshi]

[Black Isis]

[Nath]

[Arz]

[Nath]

[Black Isis]

[prettz]

So is there anyway that the group (the TyShinWa group) could apply for and be granted AA status as under a partnership or would they need to merge into one corporate entity?

[BitBasher]

If you're the GM then yeah, yoiu can do whatever you want.

[prettz]

Well I don't have enough information in either RL or SR to come up with a good idea and I'd like to base it on accepted Corporate Court info.

[Herald of Verjig...]

Bribes, bribes,and more bribes. Everyone has a price, even those on the Court, find that, pay them, and get whatever designation you want.

Conversely, blackmail, blackmail, and more blackmail.

[Nath]