Question

What is the best practice for ring-fencing risks between the parent and the subsidiary?

• A. Sharing of all financial information and resources without restriction
• B. Automatic guarantee of subsidiary debts by the parent company
• C. Explicit limited liability, separate accounts, and arm’s-length contracts
• D. Joint board of directors with overlapping responsibilities

Answer 1

Answer:

C. Explicit limited liability, separate accounts, and arm’s-length contracts

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