Parent company is a concept corresponding to subsidiary company, which refers to a company that can actually control the business decisions of other companies by holding a certain amount of equity in another company or by agreement. Corresponding to the parent company is a subsidiary, that is, a company in which another company holds more than a certain proportion of shares or actually controls another company through a contract. The legal relationship between parent company and subsidiary company is the most important legal relationship within the company group. 1. Characteristics of legal relationship between parent company and subsidiary company (1) The parent company actually controls the subsidiary company (2) The control relationship between parent company and subsidiary company is based on ownership or control agreement (3) The parent company and subsidiary company are independent legal persons and bear limited liability (1). The protection of the interests of the subsidiary company and its minority shareholders mainly includes the following two aspects: directors will bear the responsibility if they violate their obligations. 2. The lawsuit filed by shareholders on behalf of the company is also called "shareholder lawsuit". (2) Legal Adjustment of Mutual Investment Relationship In order to prevent infinite double counting of capital and inflated capital and protect the interests of minority shareholders and creditors of companies, the company laws of many countries in the world have made restrictive provisions on the proportion of mutual investment between companies and the exercise of voting rights of mutual investment companies. (3) Legal Adjustment of the Debt Liability Relationship of the Parent-subsidiary Company In general, as an independent legal person, the parent-subsidiary company bears limited liability, which is the principle applicable to the debt liability of the parent-subsidiary company in most countries. However, in some cases, if the parent company uses the principle of limited liability to harm the interests of the minority equity capital and creditors of the subsidiary for the overall interests of the group, should the parent company be responsible for the debts of the subsidiary? (4) Group consolidated financial statements Although the parent company and subsidiaries in the company group are named as independent legal persons, as an objective economic organization, the main purpose of the company group is to pursue the optimization of the overall economic benefits. In order to strengthen the supervision of corporate groups, the corporate laws of many countries stipulate the integrity of corporate groups. (2) Legal Adjustment of Mutual Investment Relationship In order to prevent infinite double counting of capital and inflated capital and protect the interests of minority shareholders and creditors of companies, the company laws of many countries in the world have made restrictive provisions on the proportion of mutual investment between companies and the exercise of voting rights of mutual investment companies. (3) Legal Adjustment of the Debt Liability Relationship of the Parent-subsidiary Company In general, as an independent legal person, the parent-subsidiary company bears limited liability, which is the principle applicable to the debt liability of the parent-subsidiary company in most countries. However, in some cases, if the parent company uses the principle of limited liability to harm the interests of the minority equity capital and creditors of the subsidiary for the overall interests of the group, should the parent company be responsible for the debts of the subsidiary? (4) Group consolidated financial statements Although the parent company and subsidiaries in the company group are named as independent legal persons, as an objective economic organization, the main purpose of the company group is to pursue the optimization of the overall economic benefits. In order to strengthen the supervision of corporate groups, the corporate laws of many countries stipulate the integrity of corporate groups.