Definition: Captive unit

Category: Business registers

Situation, generated by strategies of outsourcing, aimed at reducing costs of production and increasing productivity, such as exclusive sales or supply contracts that generate dependency of one legal unit from another without any direct participation from the part of the former into the capital share of the latter. A legal unit can thus be captive by another unit without being owned by that, but linked by a commercial contract, which ensures to the parent legal unit the exclusive rights of the work. In the case of natural persons such units are also called false self-employed. http://ec.europa.eu/eurostat/ramon/statmanuals/files/KS-32-10-216-EN-C-EN.pdf