A wholly-owned subsidiary has only one shareholder, who can only be a legal person, not a natural person. A subsidiary company has the status of a legal person and can bear civil liability independently. When it goes bankrupt and liquidates, it does not need the parent company to repay the debt. However, the civil liability of the branch company shall be borne by the head office.
Legal objectivity:
Article 115 of the Company Law A company may not provide loans to directors, supervisors or senior managers directly or through subsidiaries. Article 14 A company may 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. A company may set up subsidiaries, which have legal personality and independently bear civil liabilities according to law.