State-owned enterprises refer to enterprises whose capital is owned or controlled by the state. The behavior of these enterprises is influenced by the will and interests of the government. State-owned enterprises include wholly state-owned enterprises, wholly state-owned companies and state-owned capital holding companies. Because the wholly-owned subsidiary is wholly owned by state-owned enterprises, it naturally inherits the state-owned enterprise attributes of the parent company.
According to the relevant provisions of the Company Law, a wholly state-owned company refers to a limited liability company which is solely funded by the state and authorized by the State Council or the local people's government to perform the responsibilities of the investor. As a wholly-owned subsidiary of a wholly state-owned company, its capital comes from the parent company, so it also belongs to the category of state-owned enterprises.
What is the difference between a wholly-owned subsidiary and a holding subsidiary?
The difference between a wholly-owned subsidiary and a holding subsidiary can be summarized from the following aspects:
1. Ownership structure: A wholly-owned subsidiary means that the parent company owns 0/00% of the equity of the subsidiary, that is, the subsidiary is completely controlled by the parent company. Holding subsidiary means that the parent company owns more than 50% of the shares of the subsidiary, but not 100%, and has control over the subsidiary, but it is not wholly owned.
2. Control: A wholly-owned subsidiary means that the parent company has complete control over the wholly-owned subsidiary, including business decision-making, financial management and human resources. Although the holding subsidiary is the parent company, its control degree may be limited due to the existence of other shareholders.
3. Operational independence: A wholly-owned subsidiary is an independent legal entity, which conducts business activities in its own name and bears civil liabilities independently, although it is wholly owned by the parent company. Because of the participation of other shareholders, the holding subsidiary may need to consider the opinions and interests of other shareholders more in its business decision. Compared with wholly-owned subsidiaries, its business independence is stronger.
4. Risks and benefits: A wholly-owned subsidiary is the parent company that bears all operating risks and enjoys all operating benefits. A holding subsidiary is a parent company that bears risks and shares benefits according to its shareholding ratio, and other shareholders also bear corresponding risks and benefits.
Article 57 of the Company Law of People's Republic of China (PRC): The provisions of this section shall apply to the establishment and organization of a one-person limited liability company; Where there are no provisions in this section, the provisions in the first and second sections of this chapter shall apply. A one-person limited liability company as mentioned in this Law refers to a limited liability company with only one natural person shareholder or one corporate shareholders.