The subsidiary only reports the enterprise results to the parent company on production and operation activities, and the branch company reports the overall situation to the head office;
Disadvantages of subsidiaries: subsidiaries are independent legal entities, regarded as resident taxpayers in the country where they are established, and usually bear the same comprehensive tax obligations as other companies in that country.
Provisions of subsidiaries:
A subsidiary refers to a company whose shares are held by another company or actually controlled by another company through an agreement. Although the subsidiary is controlled by the parent company, it is still an independent enterprise with legal person status in law.
Subsidiaries shall independently bear civil liability according to law. Subsidiaries are economically dominated and controlled by the parent company, but legally, subsidiaries are independent legal persons.
The independence of subsidiaries is mainly manifested in: having an independent name and articles of association; Having an independent organization; Have independent property, be responsible for its own profits and losses, and conduct independent accounting; Carry out various non-governmental economic activities in its own name; Independently bear all the consequences and responsibilities brought by the company's actions.