Legal Question in Business Law in California

is there any issue of propriety if the top executive of a company is also an agent of its affiliate company he personnaly owns?


Asked on 9/12/14, 10:41 am

1 Answer from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I'd say no issue, based on the broad terminology used and brief facts given in your question.

For one thing, if someone "personally owns" a company, it'd be difficult for him/her NOT to be its agent. The owner of a company is almost automatically its agent for most things.

Next, how can Company Y be an affiliate of Company X if the top executive of X is the personal owner of Y? An "affiliate" of X would have to be at least partially owned by X.

In all, nothing evil or suspicious is even hinted at by the unclear and unspecific facts given. Sure, the top executive may be a crook and maybe the corporate setups are designed by him to facilitate crooked dealings. On the other hand, there's nothing inherently wrong with the top executive of one company owning or controlling another company. (If either company is publicly traded, there might be disclosure duties).

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Answered on 9/12/14, 11:00 am


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