Ask and answer. A:
Why do wholly-owned subsidiaries of legal persons generally exist in practice, and what are the key provisions? What risks may such companies encounter and what aspects should they pay attention to?
What is a wholly-owned subsidiary of a legal person?
A wholly-owned subsidiary of a legal person, which is very common in practice, refers to a subsidiary with 100% shares wholly owned by a legal person. It is a wholly-owned or controlled subsidiary of a single parent company, and most of the subsidiaries registered by ordinary groups or parent companies are wholly-owned subsidiaries.
Relevant regulations on wholly-owned subsidiaries:
0 1. A one-person limited liability company whose shareholders are natural persons cannot invest to establish a new wholly-owned subsidiary.
02. The sole proprietorship of a natural person or a legal person shall be indicated in the company registration and in the company business license.
03. At the end of each fiscal year, a financial accounting report shall be prepared and audited by an accounting firm.
04. Shareholders who cannot prove that the company's property is independent of their own property shall be jointly and severally liable for the company's debts.
What should a wholly-owned subsidiary pay attention to?
First of all, we should pay attention to the problem of foreign debt, because the shareholders of a one-person limited liability company should be jointly and severally liable for the company's debts if they can't prove that the company's property is independent of their own.
Secondly, it is the standardization of operation. In terms of financial norms, according to the law, financial and accounting reports must be prepared at the end of each fiscal year and audited by accounting firms. In terms of management norms, the articles of association need to clarify and refine the authorization authority of the board of directors, which is in line with their own situation.
What should a wholly-owned subsidiary pay attention to?
Finally, pay attention to the issue of capital contribution. Under the background of company registration and subscription system, we need to pay attention to when, how and whether we can pay. Because wholly-owned subsidiaries are often set up to meet the needs of new projects, involving new industries or high-tech industries, policy risks, technical risks and market risks are relatively large, so implementing shareholders' capital contribution obligations is an important way to avoid the risks of parent companies.