Skip to main content
Practical Handbook for Companies 2021

Box 00039 Entity forming part of a group of companies (article 42 of the Commercial Code)

This box should be ticked by entities forming part of a group of companies under the terms of Article 42 of the Commercial Code.According to Article 42(1), a group exists when a company directly or indirectly controls or may control, directly or indirectly, one or more other companies.In particular, control shall be presumed to exist when a company, which shall be deemed to be the controlling company, is in any of the following situations in relation to another company, which shall be deemed to be a subsidiary:

  1. Own the majority of the voting rights.

  2. Have the power to appoint or dismiss the majority of the members of the management body.

  3. The majority of the voting rights can be made available to through agreements with third parties.

  4. Has designated with its votes the majority of the members of the management body, who are in office at the time the consolidated accounts are to be drawn up and during the two immediately preceding financial years.Specifically, this circumstance shall be understood to apply when the majority of the members of the governing body of the subsidiary are members of the governing body or senior management of the parent or other company held by the parent.This will not give rise to consolidation if the company whose directors have been appointed is associated to another in any of the cases set forth in the first two parts of this section.

For the purposes of this section, voting rights attributable through other subsidiaries or through parties acting in their own name but on behalf of the parent or other subsidiaries, or those agreed with any other party, shall be added to the voting rights of the parent company.