The extension of the bankruptcy proceedings of the subsidiary of the holding company.

The fundamental principle in the system of joint stock companies is that the liability of the shareholder or partner is limited to the amount of their share in the company's capital, whether they participate in management or not. Consequently, board members are considered partners and are not questioned about the company's debts, regardless of whether it is in a state of bankruptcy or not. When they perform management actions in the name and for the account of the company, the legal consequences arising from their actions directly affect the company. However, the situation is different in the case of the parent company (holding company), where issues arise regarding the commission of errors or illegal actions. Can they rely on the limited liability of the holding company as stipulated by the legislator on this side? As for the other side, is the holding company obliged to complete the debt due to mistakes or illegal acts that harm the subsidiary company, creditors, and others? Or can bankruptcy be extended to it? Despite the legal independence between the controlling company (the holding) and the subsidiary company, it is known that the former maintains an influential presence in the subsidiary by controlling it financially and administratively. On the administrative side, decisions are made, and investment policies for the subsidiary are set; it is responsible for establishing the operational strategy of this company, in addition to appointing senior employees and technicians. On the financial side, the parent company determines all financial policies for the subsidiary and its financing methods, which may come from within the group or externally, depending on the circumstances. It also intervenes in determining how profits are allocated among partners in the subsidiary and defines what should be retained as reserves in the subsidiary.