I. Interests of subsidiaries
1. Independence: As an independent legal person, the subsidiary has independent assets, liabilities, rights and interests and operational autonomy, and the operating results and liabilities are borne by itself, which will not directly affect the parent company.
2. Risk control: By setting up subsidiaries, the parent company can spread the risks to all subsidiaries, reduce the operational risks of a single business and enhance the overall stability.
3. Tax incentives: According to the provisions of the tax law, subsidiaries can pay taxes independently and may enjoy some tax incentives to reduce tax costs.
Second, the disadvantages of subsidiaries
1. Establishment cost: The establishment of a subsidiary requires a lot of money, time and energy, including registration, site selection, recruitment, training and other aspects, and the cost is relatively high.
2. Management difficulty: As an independent legal person, the subsidiary needs the guidance and supervision of the parent company for its business decision-making and management, which increases the management difficulty and complexity.
3. Information disclosure: subsidiaries need to disclose information according to legal requirements, which may lead to sensitive information being leaked or used by competitors.
Third, the benefits of the branch.
1. Enjoy resources * * *: As a branch of the parent company, the branch company can * * enjoy the advantages of the parent company's resources, technology and brand, and enhance its competitiveness.
2. Management efficiency: the branch company is directly managed by the parent company, with high decision-making and execution efficiency, which is conducive to quickly responding to market changes.
3. Tax preference: In some areas, subsidiaries may enjoy the same tax preference as the parent company and reduce the tax burden.
Fourth, the disadvantages of the branch.
1. Risk bearing: As a part of the parent company, the debts and risks of the branch company need to be borne by the parent company, which may affect the financial situation of the parent company.
2. Limited independence: The business decision-making and management of the branch are strictly controlled by the parent company, and its independence is limited to some extent.
3. Geographical limitation: The business scope and geographical area of the branch company may be limited by the business scope and geographical area of the parent company, which is not conducive to expanding new markets and businesses.
To sum up:
Subsidiaries and branches have their own advantages and disadvantages. Subsidiaries have the advantages of independence, risk control and tax preference, but the establishment cost is high, the management is difficult and the information disclosure requirements are strict; The branch company has the advantages of resource sharing, high management efficiency and preferential tax, but its risk-taking ability is weak, its independence is limited and it may be restricted by the region. Therefore, enterprises should comprehensively consider their own development strategy, business needs and risk tolerance when choosing organizational forms.
Legal basis:
Company Law of the People's Republic of China
Article 14 stipulates:
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.
People's Republic of China (PRC) enterprise income tax law
Article 50 provides that:
Where a resident enterprise establishes a business organization without legal person status within the territory of China, it shall calculate and pay enterprise income tax on a consolidated basis.