Legal Engineering Tool: The Ownership Loop

Marc DeschenauxFlag btn

Marc Deschenaux

Created    on 2016-10-27 05:31

Published on 2016-10-27 06:34

From a legal standpoint, the owner is way too often liable of many things unknown to him or her. On several occasions, I have been consulted to know how to avoid owner's liability. 


This is the reason why I invented what I first called the "Triplet" before realizing that the structure herein described could count as many elements as one wanted and is thus not only a triangle but any polygonal structure.

Each grey arrow means that the company where the arrow originates is the owner of the company to which the arrow points. Thus, the scheme hereabove reads company A owns a 100% of company B, company B owns a 100% of company C and company C owns a 100% of company A.

The question becomes: Who owns the three companies ? Nobody.
Therefore, nobody is liable.

One could argue that an article of obligations in most jurisdictions prevents a company from owning directly or indirectly more than 10% of its own capital. Fine! But who does verifiy that there is an ownership loop ?
Moreover the three or more companies might be in different countries.

Another question could be: Who does control these three companies ?
But for that kind of answer, I charge serious money.