Theoretical Foundations of Parent Companies' Liability in Cases of Bankruptcy of Subsidiaries: A Comparative Study with the Australian Model Law

The parent company is a company whose share of the company against another company is sufficient to control management and operations by influencing and electing the board of directors. The most important mission of UNCITRAL is to standardize and modernize international trade law through legislative and non-legislative tools on various issues of international trade law, including the supervision of the parent company. The findings of the present study, which has been written in a descriptive-analytical method with the aim of explaining the theoretical foundations of parent companies' liability in cases of bankruptcy of subsidiaries, indicate that: a) If the company is owned by other companies, with applying the rule of breaking the veil of personality, the parent company may be declared bankrupt under certain circumstances and a bankruptcy order may be issued; b) If the company is a capital company, the parent company can be prosecuted only by applying the rule of fraud to the law.