Corporate Governance
The term ‘Corporate Governance’ refers to the question of how the European headquarters governs its U.S. subsidiary. On the one hand, the HQ in Europe – which bears the economic risk of the U.S. operations – has a legitimate operating interest in adequately influencing the U.S. affiliate. On the other hand, the subsidiary must remain independent up to a certain extent to avoid the issue of direct liability (so-called ‘piercing the corporate veil’).
The role of the Corporate Secretary is therefore of the utmost importance, because it is legally assigned this task. Due to the absence of a trade register in the United States, the Corporate Secretary conducts the administration of the company by means of the so-called Minute Book, in which all important, original documents are filed.
The Secretary should be a German-American attorney who is familiar with the applicable corporate law on both sides of the Atlantic. He forms the bridge between the U.S. subsidiary and the European Board. It is important for liability protection that the legally required decisions are not only carried out correctly, but also that an original record of their completion is filed and kept in the Minute Book. We can perform a free audit of your Minute Book on a confidential basis so that you can see if anything is missing.
Do you need information on how to manage the US subsidiary, especially to avoid liability of the headquarter “piercing the corporate veil”?
Then we recommend attending one of our Executive Management Meetings on this topic.
Of course we are also happy to advise you by phone. Send us an email or give us a call.
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