Concern (business)

A concern (German: Konzern) is a type of business group common in Europe, particularly in Germany. It results from the merger of several legally independent companies into a single economic entity under unified management.

A concern consists of a controlling enterprise and one or more controlled enterprises. The relationship between the controlling and controlled enterprises is based on the actual commercial and management relationships, unlike parent and subsidiary companies which are related by share ownership and voting rights.

Outside of professionals, the term Group, also mistakenly within the meaning of large companies – regardless of its corporate structure – is understood.

The Group concept is one of anti-trust relevance: the so-called Group privilege, the privilege of the consolidated Group companies involved, means that in itself, prohibition included practices did not violate German or European Commission (EC) anti-trust law. On the other hand, the Group concept in Banking Act in the formation of borrower unit and particularly of the large credit limits of paramount importance.

The Stock Corporation Act 1965 (Germany) ("the Act"), defines the Concern as: "one dominant and one or more dependent companies under the unified leadership of the ruling company together".

The Act only applies to German stock corporations (which are analogous to public company in the United States and the Commonwealth) and not to German limited liability corporations (which are analogous to non-publicly traded companies in the United States and the Commonwealth), which are regulated under the Limited Liability Company Act of 1892 (Germany).

The Act defines three different kinds of concern: the contractual concern, the factual concern, and the flat concern.

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