Subsidiary
Subsidiary is a term used in corporate law and business to describe a company that is controlled by another company, known as the parent company or holding company. The control is usually achieved by the parent company owning more than 50% of the subsidiary's stock.
Definition[edit | edit source]
A subsidiary is defined as a company whose voting stock—more than 50% of its stock or other equity interest—is owned by another company, known as the parent company or holding company. The parent company can control the subsidiary's policies and day-to-day operations, and can make decisions regarding the subsidiary's management and operations.
Types of Subsidiaries[edit | edit source]
There are two main types of subsidiaries: wholly owned and partially owned. A wholly owned subsidiary is a company that is completely owned by another company. The parent company owns all the shares of the subsidiary. A partially owned subsidiary, on the other hand, is a company in which the parent company owns a majority stake, but not all the shares.
Legal Status[edit | edit source]
In legal terms, a subsidiary is a separate and distinct legal entity from its parent company. This means that the subsidiary can enter into contracts, sue and be sued, own property, and conduct business in its own name. However, because the parent company has control over the subsidiary, it can also be held liable for the subsidiary's actions.
Advantages and Disadvantages[edit | edit source]
There are several advantages to establishing a subsidiary. For example, a subsidiary can operate in a different geographic area or market sector than its parent company, allowing the parent company to expand its operations. Additionally, the parent company can protect itself from the subsidiary's liabilities.
However, there are also disadvantages to having a subsidiary. For example, the parent company may have to invest a significant amount of money to establish and maintain the subsidiary. Additionally, the parent company may be held liable for the subsidiary's actions.
See Also[edit | edit source]
- Holding company
- Parent company
- Wholly owned subsidiary
- Partially owned subsidiary
- Corporate law
- Business
 | This business-related article is a stub. You can help WikiMD by expanding it. |
Search WikiMD
Ad.Tired of being Overweight? Try W8MD's physician weight loss program.
Semaglutide (Ozempic / Wegovy and Tirzepatide (Mounjaro / Zepbound) available.
Advertise on WikiMD
|
WikiMD's Wellness Encyclopedia |
| Let Food Be Thy Medicine Medicine Thy Food - Hippocrates |
Translate this page: - East Asian
中文,
日本,
한국어,
South Asian
हिन्दी,
தமிழ்,
తెలుగు,
Urdu,
ಕನ್ನಡ,
Southeast Asian
Indonesian,
Vietnamese,
Thai,
မြန်မာဘာသာ,
বাংলা
European
español,
Deutsch,
français,
Greek,
português do Brasil,
polski,
română,
русский,
Nederlands,
norsk,
svenska,
suomi,
Italian
Middle Eastern & African
عربى,
Turkish,
Persian,
Hebrew,
Afrikaans,
isiZulu,
Kiswahili,
Other
Bulgarian,
Hungarian,
Czech,
Swedish,
മലയാളം,
मराठी,
ਪੰਜਾਬੀ,
ગુજરાતી,
Portuguese,
Ukrainian
Medical Disclaimer: WikiMD is not a substitute for professional medical advice. The information on WikiMD is provided as an information resource only, may be incorrect, outdated or misleading, and is not to be used or relied on for any diagnostic or treatment purposes. Please consult your health care provider before making any healthcare decisions or for guidance about a specific medical condition. WikiMD expressly disclaims responsibility, and shall have no liability, for any damages, loss, injury, or liability whatsoever suffered as a result of your reliance on the information contained in this site. By visiting this site you agree to the foregoing terms and conditions, which may from time to time be changed or supplemented by WikiMD. If you do not agree to the foregoing terms and conditions, you should not enter or use this site. See full disclaimer.
Credits:Most images are courtesy of Wikimedia commons, and templates Wikipedia, licensed under CC BY SA or similar.
Contributors: Prab R. Tumpati, MD
