Doing Business in Azerbaijan 2009 - Azerbaijan Export ...

esponsible for its obligations. Likewise, a foundation is not
responsible for the obligations of its founders.
Unions of Legal Entities
A union of legal entities is created by business or non-commercial
entities to provide for the cooperation and coordination of their
entrepreneurial or non-commercial activities, representation, and
the protection of their common interests. A union is not responsible
for the obligations of its corporate members. Corporate members,
however, are responsible for the unions’ obligations to the extent
provided under the union’s charter.
Subsidiaries
A legal entity, whether or not established in Azerbaijan, may form a
subsidiary in Azerbaijan in one of the three legal forms available for
commercial purposes, i.e. a JSC, an LLC, or an ALC.
A subsidiary is a separate and distinct legal entity; the parent
enterprise may contribute property to its subsidiary but, typically,
is not liable for the obligations of the subsidiary.
A parent company, however, may be held liable for the obligations
of its subsidiary in bankruptcy if such bankruptcy was caused
through the fault of the parent company in connection with the
execution of its instructions.
Additionally, a parent company and its subsidiary are jointly liable
for obligations incurred by the latter as a direct result of the
implementation of instructions of the former, even if the former is
not in bankruptcy.
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