Definition:
A brother-sister group is a type of corporate structure where two or more companies are controlled by the same family or group of individuals. These companies may have overlapping ownership interests, but they are legally separate entities.
Key characteristics of a brother-sister group:
- Common ownership: The companies are controlled by the same family or group of individuals.
- Legal separation: The companies are legally separate entities, each with its own corporate structure and legal obligations.
- Interrelated relationships: The companies may have interrelated relationships, such as shared management, common suppliers, or joint ventures.
Why are brother-sister groups formed?
- Family wealth: Brother-sister groups can be a way for families to preserve and manage their wealth.
- Control and influence: They can provide a family with control and influence over multiple businesses.
- Tax benefits: In some cases, brother-sister groups can be used to achieve tax benefits.
However, it’s important to note that brother-sister groups can also be subject to increased scrutiny from tax authorities, and they may face challenges related to succession planning and family conflicts.
In essence, a brother-sister group is a corporate structure where two or more companies are controlled by the same family or group of individuals.
