Legal analysis
A wholly-owned subsidiary does not have a shareholders' meeting, and it is not necessary to convene a shareholders' meeting resolution. A wholly-owned subsidiary refers to a subsidiary wholly owned or controlled by a single parent company. The parent company can set up a wholly-owned subsidiary in two ways: the first is to set up a new company from scratch and build brand-new production equipment (such as factories, offices and machinery and equipment, etc.). ); The second is to buy existing companies and use the company's equipment for their own use. Whether to set up an international subsidiary through acquisition or new construction depends largely on the business activities planned by the parent company. For example, when a parent company sets up a subsidiary to produce the latest high-tech products, it usually needs to build a new factory, because it is difficult to reach this cutting-edge technical level by relying on local conditions. In other words, we can easily find many companies that make small things like bottles and cans in most target markets, but few companies produce the most advanced computer chips. The main disadvantage of re-establishing subsidiaries is that it takes too long, because it takes a lot of time to build new equipment, hire and train workers and develop products.
legal ground
Company Law of the People's Republic of China
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.
Article 16 The company's investment in other enterprises or providing guarantee for others shall be decided by the board of directors, shareholders' meeting or shareholders' meeting in accordance with the provisions of the company's articles of association; Where the articles of association stipulate limits on the total amount of investment or guarantee and the amount of individual investment or guarantee, it shall not exceed the prescribed limits. Where a company provides a guarantee for the company's shareholders or actual controllers, it must be resolved by the shareholders' meeting or the shareholders' meeting. Shareholders specified in the preceding paragraph or shareholders controlled by actual controllers specified in the preceding paragraph shall not participate in voting on matters specified in the preceding paragraph. The voting shall be passed by more than half of the voting rights held by other shareholders present at the meeting.