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Template:Branches and affiliates: Difference between revisions
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====Branches and head offices==== | ====Branches and head offices==== | ||
*'''[[Branch|Branches]]''': If a [[company]] is a [[Corporate personality|person]] — and legally, it is — think of a [[branch]] like its arm or leg. A “[[branch]]” is a single office or presence of the larger [[legal entity]]. It does not have its own [[legal personality]], [[creditworthiness]] or independent standing in the commercial world. Like an arm or a leg, it is part of a greater whole. It may just be a single premises of the company — the “Muswell Hill branch of Sainsbury’s”, for example — but in the world of [[high finance]] it is often the whole presence of that [[legal entity]] in a given city or country. | *'''[[Branch|Branches]]''': If a [[company]] is a [[Corporate personality|person]] — and legally, it is — think of a [[branch]] like its arm or leg. A “[[branch]]” is a single office or presence of the larger [[legal entity]]. It does not have its own [[legal personality]], [[creditworthiness]] or independent standing in the commercial world. Like an arm or a leg, it is part of a greater whole. It may just be a single premises of the company — the “Muswell Hill branch of Sainsbury’s”, for example — but in the world of [[high finance]] it is often the whole presence of that [[legal entity]] in a given city or country. | ||
*'''[[Head office]]''': A [[head office]] is just a big [[branch]]. Probably, but not necessarily, the biggest one. Probably, but not necessarily, the registered office. It is no less independent of its [[branch]]es than its branches are of it. They sink or swim together. You could think of the head office as the “head” to the branches’ arms and legs but, while, like a head, many of the company’s controlling impulses happen to sit inside the head office, the head is still no more or less liable for its contractual obligations than are any of the other parts of the organisation. A legal person is indivisible. A obligation inked by the head office is no less binding on the company, and no more valuable to a counterparty, than an valid obligation duly created by the branch manager of the two-person, only-open-on-Tuesdays-and-Thursdays, representative office in Timaru. You can, we suppose, agree that an obligation will be performed out of and by a branch or a head office, and as long as the company is solvent and doing what it promised to do, the counterpart cannot complain if this is how it does discharge its obligations. There may be tax advantages to it doing so. But once the company has failed on its obligations — gone [[Germknödel in der Luft]], so to speak — no-one will care less who was going to do what. You have a claim against the company and that is that. | *'''[[Head office]]''': A [[head office]] is just a big [[branch]]. Probably, but not necessarily, the biggest one. Probably, but not necessarily, the registered office. It is no less independent of its [[branch]]es than its branches are of it. They sink or swim together. You could think of the head office as the “head” to the branches’ arms and legs but, while, like a head, many of the company’s controlling impulses happen to sit inside the head office, the head is still no more or less liable for its contractual obligations than are any of the other parts of the organisation. A legal person is indivisible. A obligation inked by the head office is no less binding on the company, and no more valuable to a counterparty, than an valid obligation duly created by the branch manager of the two-person, only-open-on-Tuesdays-and-Thursdays, representative office in Timaru. You can, we suppose, agree that an obligation will be performed out of and by a branch or a head office, and as long as the company is solvent and doing what it promised to do, the counterpart cannot complain if this is how it does discharge its obligations. There may be tax advantages to it doing so. But once the company has failed on its obligations — gone ''[[Germknödel in der Luft]]'', so to speak — no-one will care less who was going to do what. You have a claim against the company and that is that. | ||
====Affiliates==== | ====Affiliates==== | ||
*'''[[Affiliate]]s''': By contrast, a company’s [[affiliate]] is a related but separate [[legal entity]]. If a company is a person, its affiliate is its parent, child, or sibling. Parent affiliates are actually even called [[parent]]s. Children are [[wholly-owned subsidiaries]], ugly stepchildren and bastards are [[majority-owned subsidiaries]] and siblings are known as companies “under common ownership”. There is plenty of scope for ugly sisters, black sheep and long-lost cousins from Australia, as you can imagine. Proper [[Affiliate|affiliates]] may be consolidated from a financial reporting perspective, but generally (and unless it has specifically agreed to) an affiliate is not responsible for performing the obligations of its any of its [[affiliate]]s unless it agrees to do so by [[contract]] (such as a [[guarantee]]). <br> | *'''[[Affiliate]]s''': By contrast, a company’s [[affiliate]] is a related but separate [[legal entity]]. If a company is a person, its affiliate is its parent, child, or sibling. Parent affiliates are actually even called [[parent]]s. Children are [[wholly-owned subsidiaries]], ugly stepchildren and bastards are [[majority-owned subsidiaries]] and siblings are known as companies “under common ownership”. There is plenty of scope for ugly sisters, black sheep and long-lost cousins from Australia, as you can imagine. Proper [[Affiliate|affiliates]] may be consolidated from a financial reporting perspective, but generally (and unless it has specifically agreed to) an affiliate is not responsible for performing the obligations of its any of its [[affiliate]]s unless it agrees to do so by [[contract]] (such as a [[guarantee]]). <br> | ||