What is the concept of parent company?

Concept of parent company: A subsidiary refers to a company invested by the parent company with all or major assets, registered according to law, controlled by the parent company, enjoying independent property and independently bearing civil liabilities. The parent company refers to the head office that is headquartered in the home country and effectively controls overseas economic entities through foreign direct investment in international business.

legal ground

Article 7 of the Company Law of People's Republic of China (PRC)

A company established according to law shall be issued a business license by the company registration authority. The date of issuance of the business license of the company is the date of establishment of the company.

The company's business license shall specify the company's name, domicile, registered capital, business scope, name of legal representative and other matters.

Where the matters recorded in the company's business license change, the company shall register the change according to law, and the company registration authority shall issue a new business license.

Article 14

Companies can 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.