Subsidiary company
A subsidiary company is a company under the ownership of a separate company called a parent company or holding company. A subsidiary company is a corporation or limited liability company (LLC) owned by a larger parent company or holding company. Parent companies typically own fifty percent or more of a subsidiary to have a controlling interest [MasterClass.com].
In the corporate world, a subsidiary is a company that belongs to another company, which is usually referred to as the parent company or the holding company. The parent holds a controlling interest in the subsidiary company, meaning it has or controls more than half of its stock. In cases where a subsidiary is 100% owned by another firm, the subsidiary is referred to as a wholly owned subsidiary. Subsidiaries become very important when discussing a reverse triangle mortgage [Investopedia].
A subsidiary company is a business that is owned, either partially or completely, by another company. This company is referred to as a parent company (if it has other business operations) or a holding company (if the sole purpose of the company is to own its subsidiaries). There are many reasons why you may wish to set up a subsidiary business, including diversifying your business, limiting your financial liability, and keeping your company’s brands distinct from one another. Subsidiaries are separate and distinct from their parent companies, although naturally, the parent company is likely to have a considerable influence on the subsidiary business, including seats on the board. Subsidiary companies may have independent liabilities, assets, and corporate governance, and if the subsidiary is based in a different country to the parent company, the subsidiary company will need to follow the laws and regulations of the country in which it is incorporated and operational [GoCardless].
Subsidiary Company Definition and Examples. MasterClass.com. Retrieved from: https://www.masterclass.com/articles/subsidiary-company-business-guide
Chen, J. (2020). Subsidiary Company: Definition, Example, and How It Works. Investopedia. Retrieved from: https://www.investopedia.com/terms/s/subsidiary.asp
What is a subsidiary company? GoCardless. Retrieved from: https://gocardless.com/guides/posts/what-is-a-subsidiary-company/