1. In general, the parent company does not need to bear the creditor's rights and debts of its subsidiaries, unless the assets of the subsidiaries are related to the assets of the parent company;
2. However, if the capital contribution is not in place or the capital contribution is withdrawn or the assets of the company are mixed, the parent company needs to bear the debts of its subsidiaries accordingly. The parent company is actually the controlling shareholder of the subsidiary. The subsidiary has an independent legal person status, and the parent company is only responsible for its investment in the subsidiary. If the subsidiary goes bankrupt, the subsidiary is only liable to the debtor with all its independent property.
A parent company refers to a company that owns more than a certain proportion of shares in another company or can actually control another company through an agreement. Having the qualification of a legal person and being able to bear civil liability independently. Subsidiary is a legal concept corresponding to the parent company, which refers to a company whose shares are held by another company or actually controlled by another company through an agreement. A subsidiary company has the status of a legal person and can bear civil liability independently.
In international business, a subsidiary refers to a legal person enterprise of the host country established in accordance with the law with all or part of the shares invested by the parent company. The subsidiary is legally independent from the parent company and has an independent and complete company management organization system, so it has greater independence and certain flexibility in operation. At the same time, the business activities of subsidiaries should also be controlled by the parent company and obey the needs of the overall strategy and interests of the parent company. However, this control is indirect and positively related to the proportion of equity owned by the parent company.
Relationship between parent company and subsidiary company:
(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 separate legal persons, engage in business activities in their own names and bear civil liabilities alone. Subsidiaries have their own articles of association, board of directors and other corporate decision-making bodies. A subsidiary has its own separate property, and the property it actually occupies and uses belongs to the subsidiary and has its own balance sheet. The subsidiary and the parent company shall bear their respective responsibilities to the extent of their own property and shall not be related to each other. As the largest shareholder of the subsidiary, the parent company is only responsible for the debts in the operating activities of the subsidiary to the extent of its capital contribution to the subsidiary. To set up a subsidiary, an application must be made in strict accordance with the requirements for setting up a company, and business can be started only after obtaining a business license and going through relevant formalities according to law.
legal ground
Article 14 of the Company Law of People's Republic of China (PRC) * * A company 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.