What is a group of companies: legal concept, types, structure and functional features

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Thought about what a group of companies is? From a legal point of view, this term can be considered from several sides at once. In our article you will find quite detailed information about this. Also, not only terminology will be presented here, but also information about the structure, functional features and types of organizations that are of a group nature. Such information will be equally useful for both beginner entrepreneurs and professional businessmen.

Legal concept of a group of companies

There is such a definition in the legislation: these are two or more organizations that can be controlled by one or more legal entities or individuals, and their activities are aimed at making a profit from relationships with buyers. Also, a rather important feature is the fact that the management of several organizations is most often carried out from one administrative center. Managing personmay own one or more companies or have no business at all.

Also, do not forget about the word "group", which is included in the concept under study. A group most often means from two to several million entities between which business relationships have been established. It should be noted that the group may include not only Russian citizens, but also foreign persons, as well as legal companies managed by a joint-stock company. Thus, even if the group of companies includes only two legal entities, it is far from certain that there will be the same number of individuals.

Nuances for creating a group of companies

So, now you know what a group of companies is, but this information may not be enough for a person who decides to organize such an enterprise in his city. It is also highly recommended for aspiring entrepreneurs to familiarize themselves with the ownership and management structure of such organizations, because such knowledge can be very useful in the future, especially if you have some kind of promising idea.

An important point in creating groups of companies is that the organizers must be located on the territory of one country. This trend allows the distribution of goods and services within the same region. For such activities, you can use the services of individual entrepreneurs, such as store owners. Also, a group of companies can take advantage of various benefits that allow you to significantlyreduce tax costs.

Structure of group companies

A person who decides to open a group of companies in Moscow or any other city should familiarize himself with the structure of group companies. As mentioned earlier, it may include various individuals and legal entities that have the right to manage the organization and make decisions on business development. However, in addition to management, any company must also have workers who will perform the main functions. If we are talking about joint-stock companies, then investors who decide to purchase the company's securities can become co-owners. Well, we should not forget about "accidental owners" - these are persons who became members of the company quite by accident (a person who decided to purchase a block of shares at a low price). Such people most often do not take any part in management, but they have the right to do so. You can read more about each of these groups and the responsibilities of the members in the next section of our article.

Employees of group companies

Decided to create a group of transport companies for transportation? Then you should know that the production cooperative is not the most popular form of business, and workers become participants in "people's enterprises" very reluctantly. This is due to the fact that a fairly significant part of industries breaks up after a few months, and any person wants to be employed in a speci alty that will give him confidence in the future.

Very good ideais the decision to involve workers in the management of the company. Instead of appointing a relative to the position of director and manager, it is strongly recommended to look at employees who deserve a promotion. Such actions are a real act of trust, which will provoke an increase in the workforce for your enterprise. However, appoint only responsible workers who have good leadership skills to the position of leader and his deputies.

What are random owners?

This term can be heard quite often from legal professionals when it comes to companies within the group. As a rule, this category includes individuals who became owners of companies quite by accident. Most often, a similar phenomenon is observed in joint-stock enterprises, when one of the novice brokers acquires company shares at a low price, but giving him the right to hold a leadership position in a particular company. In most cases, such a participant will give up management and leave this matter in the hands of professionals, but it also happens that an investor interested in making a profit has a huge impact on the development of the enterprise. Such actions can even cause great damage to the entire cooperative, so be sure to follow the promotional policy.

Group Investors

Quite often, a group of companies includes an investor who is ready to provide funds for developmententerprises in return for interest income. Unlike casual owners, these persons purposefully acquire the company's securities or lend the owner a certain amount of money in order to increase their capital later. Such people are only interested in the investment package, so they are unlikely to focus on methods to achieve the goal. Although any investor is interested in high-quality management, otherwise he may lose his invested funds. Depending on the company's policy, shareholders can take part in the company's affairs or remain in the shadows, content with dividend profits.

Who are the Invisibles?

Among the employees of the group of companies, you can also meet "invisible" people who manage the enterprise, but at the same time remain in the shadows. This category of persons can include politicians, officials, deputies, or even criminals who are not recorded in any way in the affairs of the company, but have a huge impact on doing business. It is not difficult to guess that group firms are most often registered with relatives of invisible people who have practically no effect on the company's affairs. Confidentiality is a major factor in invisibility, as revealing their identity and activities can lead to criminal liability. Of course, we do not recommend our readers to resort to the services of such dubious figures, but we could not help but mention their participation in group affairs.

Leaderscompanies

Finally, we got to the very top - the owners of companies that enter into a cooperative. Such positions are most often occupied by individual entrepreneurs or legal entities. For example, if one of our readers decides to open a group of construction companies, then most often he will interact with various corporations owned by joint stock communities.

The management of companies has a very big responsibility, because they risk not only their own funds, but also the finances of the group that their companies belong to. In some cases, the risk may even extend to the owner's personal property, for example, if he fails to repay the debt to the group from the company's funds. Therefore, it is necessary to draw up an agreement on joining the group very carefully.

What is a management company group?

In some cases, the management of a common business may not be carried out by all the companies that are part of it, but only by a certain group that has the right to vote. As a rule, such a cooperative includes especially large corporations that have invested most of the funds in the development of the group. Who then are the rest of the organizations? Some kind of subordinate who cannot take part in the management of the group, but receive a solid income from cooperation.

If we draw an analogy with individual entrepreneurship, then joining such a cooperative can be compared with franchising. Sheltered under the wing of the famousbrand, the company does not have the right to change the pricing policy and production standards, but it is given access to the resources of the company and even its customers. Roughly the same thing happens with small companies that are subordinate to managers.

Why is an alliance formed?

Now you know what a group of companies is and how it is managed. However, many aspiring entrepreneurs very often ask themselves the same question: "Why do companies unite in cooperatives at all, if it is much easier to work independently?" We answer: most often, such associations are formed in order to fight competition and together resist companies that will try to attract the attention of customers using various dishonest methods. In addition, group associations allow you to develop several companies much faster, because any work is most easily done together, using the strengths of your assistant and protecting the weak. Also, groups of companies can be founded to perform various financial manipulations, for example, to attract the attention of investors, but that's another story…

Classification and types of groups

As mentioned earlier, a group of companies includes several individuals or legal entities that are interested in a common goal. However, the novice entrepreneur should also be aware of the classification of such groups based on the types of owners:

• legal entities;
• individuals;
• state.

Also, do not forget that a combination of different types of control is possible. For example, individuals can enter into a cooperative with legal entities, since this promises a very good benefit in the form of start-up capital. And legal entities often combine with the state to receive various benefits and advantages over other companies.

Even a novice entrepreneur should understand that behind almost every legal entity is an individual who directly or indirectly controls the affairs of the company and group. Why is it impossible to become a member of the alliance in the role of an individual? The fact is that in this case, the owner of the company is responsible to the entire group, pledging not only the property of the company, but also his personal (houses, cars, and so on). Therefore, one should carefully choose the form of business that will be used to create a cooperative.

Video clip

We hope you now understand what a group of companies is and how they differ from sole proprietorship. If you still have any questions about this, we strongly recommend that you watch a short video. It tells how to build a group of companies, what goals to set for several enterprises, how to become part of a limited liability company, and many other aspects that will be useful to a novice entrepreneur and even an experienced businessman.

Conclusion

The information in our article is for guidance only, but you canuse it in practice if you see fit. For example, before creating a group of transport companies, it will be very useful to learn about the classification of such alliances, as well as the methods of their management. To do this, read the information in the relevant sections and make notes in your business plan. If among our readers there are experienced entrepreneurs who once managed to gather several companies into one group, please express your opinion about this business scheme in the comments. Perhaps your experience will allow some of the novice businessmen not to make common mistakes.