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.
Legal basis: Branch companies can be established in Article 14 of People's Republic of China (PRC) Company Law. 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.