A wholly-owned subsidiary refers to a company with only one corporate shareholders, which is owned or controlled by the only parent company, and its shares account for 100% of the subsidiary. The parent company can completely control the financial and business decisions of wholly-owned subsidiaries. However, a wholly-owned subsidiary is an independent legal person with its own independent name, articles of association and organization, and acts in its own name. Creditor's rights and debts arising from the operation of an enterprise shall be independently borne in its own name and may bear civil liability in its own name. If the wholly-owned subsidiary operates illegally, but it has nothing to do with the parent company, the parent company will not bear any responsibility. A wholly-owned subsidiary has an independent litigation subject status and can bear the responsibility independently. However, if the parent company guarantees a wholly-owned subsidiary, it shall bear the responsibility. Article 3 of the Company Law A company is an enterprise legal person, with independent legal person property and legal person property rights. The company is liable for its debts with all its property. Shareholders of a limited liability company shall be jointly and severally liable for the company's capital contribution; Shareholders of a joint stock limited company shall be responsible for the shares subscribed by them. If the shareholders of a one-person limited liability company cannot prove that the company's property is independent of the shareholders, they shall be jointly and severally liable.
Legal objectivity:
According to Article 14 of the Company Law of People's Republic of China (PRC), 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.