Legal analysis: In general, it is not necessary. Both the parent company and the subsidiary company are legally independent legal entities established through the principle of limited liability, and do not bear legal responsibilities for each other. But economically, they are inextricably linked. The parent company controls and manages its subsidiaries in terms of capital, technology, brand, senior management and development strategy. However, in the event of a debt relationship, according to the principle of limited liability of legal persons, each subsidiary can only be independently responsible for its debts, and the parent company is not responsible. In this way, if a subsidiary goes bankrupt and its bankrupt property is few, the creditors of the subsidiary can't be paid off basically, and whether it can claim compensation for the property of the parent company becomes a very complicated and difficult legal issue.
Legal basis: Branch companies can be established in Article 14 of People's Republic of China (PRC) Company Law. 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.