1. What is the relationship between parent company and subsidiary company?
1. The relationship between the parent company and its subsidiaries is as follows:
(1) The subsidiary is actually controlled by the parent company. The parent company has the actual decision-making power on major issues of subsidiaries, can decide the composition of the board of directors of subsidiaries, and can directly exercise the power of the board of directors to appoint directors;
(2) The relationship between parent company and subsidiary company is based on share possession or control agreement. Generally speaking, shareholders with more shares have greater decision-making power over company affairs. Therefore, if a company owns more than 50% of the shares of another company, it can actually control the company. In practice, most companies have scattered shares, and as long as they own a certain proportion of shares, they can gain control. In addition to holding shares, a company can also control another company by signing some special contracts or agreements. The relationship between subsidiaries and parent companies is very clear.
(3) The parent company and subsidiaries are independent legal persons. Although subsidiaries are actually controlled by the parent company, they are restricted and managed by the parent company in many aspects, and some of them are actually similar to the branches of the parent company. But legally speaking, the subsidiary is an independent legal person, engaged in business activities in its own name, and bears civil liability alone.
2. Legal basis: Article 14 of People's Republic of China (PRC) Company Law.
Branches and subsidiaries may set up branches. The establishment of a branch company shall apply to the company registration authority for registration and obtain a business license. A branch company does not have legal person status, and its civil liability shall be borne by the company.
A company may set up subsidiaries, which have legal personality and independently bear civil liabilities according to law.
2. What's the difference between a branch and a subsidiary?
1, established in different ways;
2. Different legal status;
3. Different controlled modes;
4. There are different ways to assume debt responsibility;
5. The legal effect in litigation is different.
I hope the above content can help you. Please consult a professional lawyer if you have any other questions.
Legal basis: People's Republic of China (PRC) Company Law.
Article 14
Companies can set up branches. The establishment of a branch company shall apply to the company registration authority for registration and obtain a business license. A branch company does not have legal person status, and its civil liability shall be borne by the company.
A company may set up subsidiaries, which have legal personality and independently bear civil liabilities according to law.