Lifting the corporate veil in corporate groups

Öykü ÇABUK, Lifting the Corporate Veil in Corporate Groups, Başkent University, Institute of Social Sciences, Private Law Master's Program with Thesis, 2025 Corporate groups are structures formed by one or more companies coming together within the framework of conditions stipulated by law. Corporate groups consist of three elements: the parent company, the subsidiary, and the will of control. In Turkish law, the "control system" has been adopted regarding the establishment of control within corporate groups. Based on their formation principles, corporate groups are classified under three main categories: contractual and de facto corporate groups, horizontal and vertical corporate groups, and corporate groups formed through integration. Corporate groups share similarities with Konzerns, holdings, and joint ventures. In a corporate group, liability provisions are examined under three headings: liability in case of unlawful exercise of control, liability in cases of absolute control, and liability based on trust. The piercing of the corporate veil theory comes into play in cases where the liability provisions within corporate groups cannot be applied. This theory, which explains under which circumstances a company's independent legal personality may be disregarded and is considered one of the exceptions to the principle of limited liability, is often evaluated together with the organic bond concept. The organic bond refers to the managerial, economic, and legal unity between companies and plays a decisive role in judicial decisions when assessed alongside the piercing of the corporate veil theory. The piercing of the corporate veil theory first emerged in the Anglo-Saxon legal system. There are both similarities and distinct differences between Turkish law and the practices in the U.S. and U.K. legal systems regarding piercing the corporate veil.