The secondary company is the direct subordinate of the primary company, and the primary company controls all the important powers of the secondary company, such as operation and personnel.
As a first-class company, an enterprise group is a parent company, and the company it holds or controls as a shareholder is a second-class company. Companies owned or controlled by such secondary companies are called "tertiary companies" of enterprise groups.
Extended data:
The difference between a subsidiary and a branch:
1. Establishment method:
Subsidiary: established by one shareholder (one-person limited liability company) or two or more shareholders in accordance with the conditions and methods for the establishment of the company stipulated in the Company Law.
Branch: The head office applies to the local industrial and commercial department to set up outside its residence. It is a branch of the company and independently conducts business activities within the scope authorized by the company.
2. Investment restrictions on the parent company/headquarters:
Subsidiary: Where a company invests in other limited liability companies or joint stock limited companies, if 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.
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