1. Is the subsidiary of the group company a subsidiary?
The subsidiary of the group company is a subsidiary, and the relationship between the subsidiary and the group company is:
(1) The subsidiary is actually controlled by the parent company.
The parent company has the actual decision-making power on major issues of its subsidiaries, can decide the composition of the board of directors of its subsidiaries, and can directly exercise the power to appoint directors of the board of directors.
(2) The relationship between parent company and subsidiary company is based on the agreement of share possession or control.
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, the shares of most companies are scattered, and as long as they have more than a certain proportion of shares, they can obtain a controlling position. In addition to controlling shares, a company can also control another company by concluding some special contracts or agreements.
(3) The parent company and subsidiaries are independent legal persons.
Although subsidiaries are actually controlled by the parent company, restricted and managed by the parent company in many aspects, and some of them are actually similar to the branches of the parent company, legally speaking, subsidiaries belong to independent legal persons, engage in business activities in their own names and independently bear civil liabilities.
2. What's the difference between a subsidiary and a branch?
1, established in different ways.
The subsidiary is established by the shareholders of the company in accordance with the provisions of the Company Law, and meets the requirements of the Company Law on the conditions for the establishment of the company and the mode of capital contribution. The head office applies to the local industrial and commercial authorities outside its domicile for the establishment of a branch office, which belongs to the establishment of a branch office.
2. Different legal status
A subsidiary is an independent legal person with legal personality, independent name, articles of association and organization, and engages in business activities in its own name. Branches have no legal personality, independent name, articles of association and organization, and engage in business activities in the name of branches of the head office.
3. Different control methods
Generally, the parent company does not directly control its subsidiaries, but affects its production and operation activities by appointing and dismissing board members and making investment decisions. The personnel, business and property of the branch company are directly controlled by the head office and engaged in business activities within the business scope of the head office.
There are different ways to assume debt responsibility.
As an independent legal person, a subsidiary is liable for its debts with all its assets. As the branch does not have its own independent property, it is financially unified with the head office. Therefore, the head office is responsible for paying off its operating debts, that is, the head office is responsible for the debts in the operating activities of the branch company to the extent of all its property.
5. Obtain different business licenses.
The subsidiary receives the Business License of Enterprise as a Legal Person with the name of the legal representative. The branch company obtains a business license with the words "person in charge" on it.
6. Different product packaging labels
A subsidiary must indicate its name and domicile on the outer packaging of its products. A branch company may indicate its own name and domicile, or indicate the name and domicile of the head office at the same time, or only the name and domicile of the head office.
In judicial practice, many people can't tell a subsidiary from a branch. In fact, the branch is not a subsidiary of the group company strictly, but a branch of the company. Moreover, the branch company has no independent legal personality, and the corresponding legal responsibilities are borne by the group company itself.