A subsidiary is a subsidiary and is actually controlled by another company. The entity that controls it is called the parent company or the holding company. A natural person cannot be affiliated with an organization, and only a legal person as stipulated in the civil law can be affiliated. This is because natural persons will act according to their own motives, while legal persons can only operate through their own directors, cadres and employees. The ownership of shares gives the parent company enough voting rights to decide the composition of its management team, so that it can control its actions. Usually, if you own a subsidiary, you must first own more than 50% of its shares. Subsidiaries have independent qualifications, own all their own property, their own company name and articles of association, carry out business activities and engage in various civil activities in their own names, and independently bear all the consequences and responsibilities brought about by the company's actions. However, major decisions or major personnel arrangements involving the interests of the company still have to be decided by the parent company.
Legal basis: Article 14 of the Company Law of People's Republic of China (PRC).
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.
Article 115
The company shall not provide loans to directors, supervisors and senior managers directly or through subsidiaries.