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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
QUOTE
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.


Actually that is not true. Sure there is some ambiguity between the two terms, subsidiary and division, but they are used differently. A division of a Megacorp is part of the main body of that corp, it doesn't seem to be independent. A subsidiary, on the other hand, seems to have a certain amount of autonomy from the parent megacorp, such as its own ceo, board of directors, market shares, etc.

The interesting thing is that some Megacorps have division and others have subsidiaries. In fact Renraku has divisions that have their own subsidiaries. This is how I have understood the difference based on what is in Corporate Download.

Veracusse
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
QUOTE (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.

Correct. A corporate facility must fulfill two requirements to receive the benefits of extraterritoriality:

- It must be officially recognized and marked as belonging to the extraterritorial corporation. A secret shell company operating as an Ares front does not receive extraterritoriality benefits. An AresArms factory or a Mercury Express courier truck would receive the benefits of extraterritoriality, because these are both publically recognized parts of Ares Macrotechnology.

- It must be physically demarcated from the area around it. The inside of the Mercury Express truck is a discrete location from the outside and the AresArms factory has a chainlink fence marked with signage indicating who owns it. On the other hand, a tent in the middle of the Mojave with an Ares sign out front or a stall in an open-air market is probably not sufficient to claim extraterritoriality. It appears that leased land can be extraterritorial, but I'm not sure how that would apply to something like a skybox at a football stadium (although it is fairly clear that a skybox where a corporate executive had simply rented it for the day would not receive the benefits, it's less clear what would happen if the corporation leased the box for a longer term -- say, a year or two).

As for subsidiary vs. division, as someone said before, a subsidiary is a more autonomous unit; basically, it's an entirely different corporation, but the majority of its stock is owned by the parent corporation (ie, "a wholly-owned subsidiary of BlahCorp" means BlahCorp owns all the stock). The subsidiary has its own CEO/CFO/COO and board of directors, although obviously the parent corporation has most of the say as to who that will be. However, if it's not a wholly-owned subsidiary, they wouldn't have complete control. A division would be part of the company that still still reports to the company's board and CEO. For instance, BlahCorp has a Financial Services division, which still reports to the BlahCorp board and CEO. Usually, this would be led by a senior VP. I'm not sure how AresArms is related to Ares Macrotech, but I thought it was a division.
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
QUOTE (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.?

Acts of Great Dragon are not covered by insurance.

~J
Black Isis
QUOTE (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.

That's not necessarily true. Shiawase, for instance, has Shiawase Atomics, Shiawase Envirotech, etc, and they are clearly stated to be divisions, not subsidiaries. As for Ares, I'm not sure how they are broken down; AresArms, AresSpace, and Knight Errant are large enough entities that they could easily qualify as a special case though, which is why I wasn't sure. If Corporate Shadowfiles or Corporate Download says it's a subsidiary though, then that's obviously what it is.
Nath
QUOTE (prettz)
QUOTE (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.

It depends. I'm here assuming the wording used in the books are the right ones. To be as clear as possible, what I call an internal division is a plate on the door for the corp's administration to organize ; an external division is a subsidiary taking care of all the business in a certain geographic or business sector.

Ares Arms, AresSpace, AGE, KE, GM are corporations owned by Ares Macrotechnology. Ares UCAS, Ares CAS, Ares Europe... are seemingly internal divisions of Ares Macrotechnology (there's only one isolated blurb in Corporate Shadowfiles mentionning Ares UCAS stock on quotation).

Aztechnology North America, South America, Europe, Africa, Asia and Australasia are internal regional divisions of Aztechnology. PEMEX, Medicarro, Dassault are corporations owned of Aztechnology.

Mitsuhama Computers, Mitsuhama Automatronics, Mitsuhama Media and so on are corporations owned by Mitsuhama Computer Technologies that I imagine are working as external functional divisions. MCT itself may have internal regional divisions.

Renraku America, Renraku Asia, Renraku Australiasia and Renraku Europa are corporations owned by Renraku Computer Systems, acting as external regional divisions. Renraku Computer Systems has managers, lawyers and accountants who are probably working also within internal divisions mirroring the real ones (there's some lines in the corner of page 76 and 78 of Corporate Download who quite clearly describe this).

Shiawase Biotech, Shiawase Envirotech and Shiawase Atomics are seemingly internal divisions of Shiawase Corporation. Again, one line contradict this, in Corporate Download, one saying Shiawase Armaments is a subsidiary of Shiawase Atomics ; for Shiawase Atomics to own something, it had to be a corporation by itself. Stuff like Fuchi Simsense Studio or Ressha Corp are subsidiaries of Shiawase Corp.

Yamatetsu Corporation has internal regional divisions. MetaErgonomics, Crashcart and the likes are corporations owned by Yamatetsu Corp.

Cross Applied Technologies' structure is similar to either Shiawase or Renraku. Cross Matrix Technologies, Cross Advanced Eletronics, Cross Biomedical... are listed as divisions, but a part of CDL text says Dawn Devlepment and Virtual Air are "owned" by CMT, Fleche Armaments by CAE ; as said above, for them to own something, they'd have to be corporations.

Novatech and Wuxing have internal regional divisions. Wuxing Inc. owns two corporations, Wuxing Financial Services and Wuxing Worldwide Shipping, who may be acting as external functional divisions.
Arz
QUOTE (prettz)

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.

My personal take on your info:

The holding LLC does not own enough interest in the partner companies to qualifiy as a controlling partnership. It does qualify as a joint venture project.

A modern example of this: Sunoco & United each cede 10% of their resources for a research project. They each own 50% of the joint venture and even if the JV later buys stock in the parent companies it is still evenly owned by them.

What I mean by all that jargon, your holding LLC does not control much of it's partners assets and unless the assets it control are worth enough for AA status can it achieve that level. Also, since it does not control enough in the partner companies it can never grant them extraterritoriality even if its a AA.

The partners could switch some of there vital ops over to the joint venture and protect those assets but that's about it.

Just my take on it. spin.gif
Nath
QUOTE ("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.?

Stability could be summed as the cash reserves and long-term earnings forecasts. Since Zurich-Orbital exchanges corp scrip, the Corporate Court is likely to make sure megacorporations can repay for a sizeable amount of the scrip they issue. It should be near impossible (near) for a megacorporation to go bankrupt and disappear, leaving thousands of corporate citizens and extraterritorial compounds, armed forces and off-limit assets (space stations or naval vessels) stateless out in the open.

Infightings make a corp less efficient overall, but it does not have a specific effect on this. Note that fuchi did not crumble or went bankrupt. It broke up. Fuchi Industrial Electronics was a lame multinational present only in Europe and Africa but it was not dying. Korin Yamana just decided that he was too old to rebuild the empire he wanted and sold out to the Shiawase instead. A point seemingly missed by the authors in the whole plot is that, even at low price, to acquire most of Fuchi America and Fuchi Asia, Villiers and Renraku had to pay something. From this point of view the two real blow for Fuchi were the lost of JRJ International AAA share in Zurich-Orbital, and the preferred rates going with it, and the reparations paid to Renraku when it was proved Miles Lanier conducted industrial espionnage within Renraku on the behalf of Fuchi. The Corporate Court wants megacorps to be stable, it also wants to be able to really hurt them when it wants to.

And it's also the only way I found to make sense of those crappy corporate asset ratings rules that overate corp "good at nothing, bad at everything" at the expense of specialized leaders. The business model of Shadowrun seems to be very different from nowadays. IRL, there's a balance between two different casts, the industrial and the financial groups. Each handles cash very differently. In SR the divide no longer stands. Financial groups are almost absent from the frontline, and megacorps includes their own financial branch (in particular Saeder-Krupp, but it might mean Lofwyr brought in really huge cash reserves). It's instead indeed very similar to the Japanese economic model inherited from Zaibatsu and Keiretsu. The difference between a simple A multinational and a megacorp worthy of its AA rating would be that with interests in agriculture, consumer goods, natural ressources, military equipment, aeronautics, space conquest, pharmaceuticals, buildings and real estate, all over the world, the megacorps would nearly always be able to compensate one or several negative market trends with the rest, when a crisis in one ot its core business or geogrpahic market will put a multinational in a critical condition.
Black Isis
QUOTE (Nath)
Shiawase Biotech, Shiawase Envirotech and Shiawase Atomics are seemingly internal divisions of Shiawase Corporation. Again, one line contradict this, in Corporate Download, one saying Shiawase Armaments is a subsidiary of Shiawase Atomics ; for Shiawase Atomics to own something, it had to be a corporation by itself. Stuff like Fuchi Simsense Studio or Ressha Corp are subsidiaries of Shiawase Corp.

Considering the way certain parts of Shiawase are broken down by the family member who owns the corporation, it's possible that saying "Shiawase Armaments is a subsidiary of Shiawase Atomics" is just to indicate which sphere of influence it's in. I know, it's a stretch at best, but it might be a good retcon. It's possible that Shiawase could have some funky corporate structure where each division has a Mergers and Acquisitions department, but that would be....odd and redundant, to say the least.
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 Verjigorm
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
QUOTE (Corporate Download - page 55)
> Blackmailing multiple Corporate Court justices? In your dreams, chummer.
> Sinik
Herald of Verjigorm
I'm the one giving advice, not the one taking it. It would be fun to watch if you hadn't brought in some reality.
Nath
QUOTE (prettz @ Aug 25 2004, 10:27 PM)
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.


Aside from the good point about GM prerogatives above, no way to get it the way you described. So to speak, when the Corporate Court grants extraterritoriality, there's room on the paper for only one name (so that in the end, there's one name to put on the signs). And this name has to belong to a legit incorporated company, not some amical club or loose association of wills. The very fact that each of the three company retains all the way an independant decision capability in the end precisely prevent it from being considered as a single entity, no matter how you engineer the whole thing. If each is free to leave overnight, it means the group can lose one third of its strength overnight as well (and two third if it's a really bad night), and that is not stability. Your conditions are mutually exclusive: for the company to remain independant, you need to have have half-and-one of the stock to be owned by the family (actually even two third to be sure) ; for the company to benefit from extraterritoriality, you need half-and-one of the stock to be owned by a megacorp. Mathematically impossible to staisfy simultaneously.

I'm not an expert, just an amateur, but eventually... if the Corporate Court accept to grant extraterritoriality to a corporation that have golden shares, and each owns at least 75% of their companies. Tylon, Shinkon and Wayler could then create the company TSW, and design three merger plans that give them a golden share of TSW with a veto right over every decision concerning their ex-company, in exchange for half of the stock. Thus, TSW would own 50% (I round down) of Tylon Industries, Shinkon Banks and Wayler Shipping.
With this structure, TSW weights half the financial weight of the three companies together. So it would reach AA size when each of the three companies is about two-third the size of an AA. Each of the three families receive two-third of the dividends from their own companies, and one sixth from the two other.
If let say Mr.Tylon disagrees about a decision TSW board is about to takes concernign Tylon Industries (which can occur if Shinkon and Wayler unite against him), his golden share allows him to block everything. TSW is then unable to intervene at Tylon Industries' shareholding meetings, and Tylon can control the thing with the 25% he retained (since 50% of the vote held by TSW are immobilized by his golden share's veto). If the two other untied once again him, he'd better withdraw from the group by voting for Tylon Indutries to emit 50% more of Tylon Industries stock, selling its stake in TSW and buying the new Tylon shares with the money. He'll be back again as the only one controlling Tylon Industries, who'd lose extraterritoriality, and TSW and thus the two other families would still own 33% of his company (and get that third of his dividends). Of course this is a theoritical example that assume the three companies have the exact same size.

Actually, I'm wondering if Fuchi did not have an arrangement similar to this, as there was an agreement that put and kept Nakatomi heading Fuchi Asia, Yamana Fuchi Pan-Europa and Villiers Fuchi America. The only difference is that the three divisions of Fuchi still shared some assets (Fuchi Corporate Security, Fuchi Orbital, delta level cybernetic research, subsdiaries from one division resorting to products and services from another) who were the battlefield were infightings took places.
prettz
I like the way you have that set up with the golden shares Nath, thanks. That will work for the way I wanted the corporation to run and how the three heads influence each other. I wanted them to be indenpendent of each other but upon reflection I see that chances of that are nil so this looks like the best way.
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