First, the head office and branches
1. concept.
The head office manages its branches and has the right to exercise command, management and supervision over the production and operation, capital allocation and personnel management of its subsidiaries. It is qualified as a legal person and can independently bear civil liabilities. Branch is a legal concept corresponding to the head office, which refers to a branch that is managed by the head office in terms of business, funds and personnel and does not have legal person status. The branch is not independent in law and economy, and belongs to the subsidiary of the head office.
2. Contact and difference.
(1) The branch does not have its own independent property, and the property actually occupied and used is part of the property of the head office and listed in the balance sheet of the head office.
(2) The branch does not have the legal person qualification and does not bear civil liability independently.
(3) The establishment procedure of a branch is different from that of a company in the general sense, and the establishment of a branch only requires simple registration and business opening procedures.
(4) The branch does not have its own articles of association, and there is no corporate management decision-making body such as the board of directors.
(5) The name of the branch company is the name of the head office plus the words of the company. Although the name has the word company, it is not a real company.
Second, the parent company and subsidiaries
1. concept.
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.
2. Contact and difference.
(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 independent legal persons, engage in business activities in their own names and independently bear civil liabilities.
Subsidiaries have their own articles of association, board of directors and other corporate decision-making bodies. A subsidiary has its own independent 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.
Third, subsidiaries and branches
1. Different building methods.
The subsidiary is established by the shareholders of the company in accordance with the provisions of the Company Law, and meets the requirements of the Company Law on the conditions for the establishment of the company and the mode of capital contribution. The head office applies to the local industrial and commercial authorities outside its domicile for the establishment of a branch office, which belongs to the establishment of a branch office.
2. Different legal status.
A subsidiary is an independent legal person with legal personality, independent name, articles of association and organization, and engages in business activities in its own name. Branches have no legal personality, independent name, articles of association and organization, and engage in business activities in the name of branches of the head office.
3. Different control methods.
Generally, the parent company does not directly control its subsidiaries, but affects its production and operation activities by appointing and dismissing board members and making investment decisions. The personnel, business and property of the branch company are directly controlled by the head office and engaged in business activities within the business scope of the head office.
There are different ways to assume debt responsibility.
As an independent legal person, a subsidiary is liable for its debts with all its assets. As the branch does not have its own independent property, it is financially unified with the head office. Therefore, the head office is responsible for paying off its operating debts, that is, the head office is responsible for the debts in the operating activities of the branch company to the extent of all its property.
5. The business license obtained is different.
The subsidiary receives the Business License of Enterprise as a Legal Person with the name of the legal representative. The branch company obtains a business license with the words "person in charge" on it.
6. Different product packaging labels.
A subsidiary must indicate its name and domicile on the outer packaging of its products. A branch company may indicate its own name and domicile, or indicate the name and domicile of the head office at the same time, or only the name and domicile of the head office.