NEWSLETTER-2017

52 NEWSLETTER 2017 ability for activities of the subsidiaries is restricted. This restriction of liability is based on the differentiated joint and several liability under Article 557(1) regulating the internal relations of the liable parties. Pursuant to this article, “ if there are more than one parties liable for the compensation of the same damages, each of the liable parties will be jointly and severally liable to the extent that liability can be attributed to that party according to fault / negligence and the circumstances of the case. ” Provided that the actual commercial activity is carried out by the subsidiary, without taking instructions from the holding board of directors, liability of the board members of such holding company is less for the subsidiary activities than for the subsidiary board mem- bers. In light of the concept of “attribution of damages,” as regulated under Article 557(1) of the TCC, a reasonable link of causation should be established between the damages and the actions of the damaging party for such damages to be attributed to that party 7 . Therefore, in order for the liability of the holding board members to be limited in respect of the damages arising out of the actions of the subsidiary, such board members should not have given any instructions to cause any damaging actions. Potential Liability arising out of the Provisions Regarding Groups of Companies Dominance of holding companies on the subsidiaries is per- petual, and subsidiaries within the framework of the holding work in accordance with a main policy. However, such circumstances do not prevent the freedom of subsidiaries as required by their field of work. Subsidiaries within the framework of holdings possess separate legal personalities, and the union that we see does not allow for mergers 8 . On the other hand, there might be a structure that a holding is also conceived of as a group of companies under the TCC. In order to conclude that such a group of companies exists, and which is a different concept than for a holding company, there must be (i) two 7 Tekinalp, Ünal, Sermaye Ortaklıklarının Yeni Hukuku, 4 th ed., İstanbul, 2015, p.464. 8 Üçışık, Güzin; Çelik, Aydın, Anonim Ortaklıklar Hukuku, V. I, 2013, p.89.