Cash pooling enables corporate groups to minimise banking facilities expenditure through economies of scale. However, cash pooling agreements must be carefully structured in order to minimise the risks of civil or criminal liability of the participating group companies and their officers, according to CMS, the global law firm.
The CMS Guide to Cash Pooling provides an overview of the risks of liability associated with cash pooling in 23 jurisdictions and discusses the various means by which such liability may be avoided. The jurisdictions include: Austria, Belgium, Bulgaria, China, Croatia, Czech Republic, France, Germany, Hungary, Italy, Luxembourg, The Netherlands, Poland, Portugal, Russia, Serbia, Slovakia, Slovenia, Spain, Switzerland, Ukraine and the United Kingdom.
Contract and corporate law expert Daniela Karollus-Bruner, partner of CMS in Vienna comments: “The specific structure of individual cash pooling arrangements can vary and from our experience, we know that these agreements must be carefully structured in order to minimise the risks of civil or criminal liability of the participating group companies and their officers. This becomes a real challenge when working across jurisdictions.”
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