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Subsidiary

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A subsidiary is a company that is controlled by another company, known as the parent company or holding company. Subsidiaries are separate legal entities but are majority-owned or wholly-owned by the parent company, giving the parent company significant control over their operations and management. Subsidiaries are commonly established for various reasons, including expansion into new markets, diversification of business activities, and tax or regulatory advantages. While subsidiaries operate independently to some extent, they are ultimately accountable to the parent company and may be subject to its strategic direction, financial reporting requirements, and governance policies. Subsidiaries can provide the parent company with opportunities for growth and synergies across different business units or geographic regions, while also allowing for risk mitigation and legal separation of liabilities. Overall, subsidiaries play a crucial role in corporate structures, facilitating business expansion and diversification strategies for multinational corporations.