First, can the branch be financially independent?
Branch is a concept corresponding to the head office or company. The businesses of many large enterprises are distributed all over the country and even in many countries, and the branches or subsidiaries established by the company directly engage in these businesses. These branches or subsidiaries are called branches. The company itself is called the head office or company.
Although the relationship between the branch and the head office is somewhat similar to that between the subsidiary and the parent company. However, the legal status of a branch company is completely different from that of a subsidiary company, and it has no independent legal status.
A branch is a branch or subsidiary directly engaged in business activities of the head office. Although a branch has the word company, it is not a real company. Because the branch does not have the qualification of an enterprise legal person, does not have an independent legal status, and does not bear civil liability independently.
Second, the difference between subsidiaries and branches
According to the Company Law, a company can set up branches, which do not have the qualification of enterprise legal person, and their civil liabilities shall be borne by the company. A company may establish subsidiaries, which have the status of enterprise legal persons and independently bear civil liabilities according to law.
The differences between subsidiaries and branches are as follows:
(1) The subsidiary is an independent legal person with its own independent name, articles of association and organization. Conduct activities in its own name, and the creditor's rights and debts incurred in the course of operation shall be borne independently by itself. The branch does not have the qualification of enterprise legal person and has no independent name. Its name should be preceded by the name of the affiliated company, which is established according to law and is only a branch of the company.
(2) The parent company's control over its subsidiaries must meet certain legal conditions. Generally, the parent company does not directly control its subsidiaries, but more indirectly controls them, that is, it affects the production and operation decisions of subsidiaries by appointing and dismissing board members and making investment decisions. However, branch offices are different. Its personnel, business and property are directly controlled by affiliated companies and engaged in business activities within the business scope of affiliated companies.
(3) Different ways of taking responsibility. As the largest shareholder of the subsidiary, the parent company is only responsible for the debts in the operating activities of the subsidiary to the extent of its capital contribution to the subsidiary; As an independent legal person, subsidiaries are liable for operating liabilities with all their property. Because the branch company does not have its own independent property, it is accounted for together with the affiliated company economically, so the liabilities in its business activities are paid off by the affiliated company, that is, the affiliated company is liable for the debts in the operation of the branch company to the extent of all its assets.
However, for better management, the head office can set up an independent financial department in the branches through the resolution of the board of directors. Therefore, the financial affairs of the branch can be independent or not.
Third, the main characteristics of the branch
(1) The branch company is established by the head office according to law, and its main business activities are completely decided by the head office. Branches generally conduct business activities in the name of the head office and according to the entrustment of the head office.
(2) The branch does not have its own independent property, and all the assets of the branch belong to the head office. The branch and the head office are unified in economic accounting, and the property actually occupied and used by them is part of the property of the head office and included in the balance sheet of the head office.
(3) A branch is not a company, and its establishment does not need to follow the company's establishment procedures, as long as it can be established through simple registration and industrial and commercial procedures.
(4) Branches do not bear civil liabilities independently, and there is no corporate decision-making and business executive body in the form of board of directors. The head office shall bear unlimited liability for the debts of its branches.
(5) The branch company does not have its own independent name and articles of association, and can only use the same name and articles of association as the head office.
The above is my own collection of legal knowledge about whether the financial independence of the branch can be achieved. As can be seen from the above, the finance of a branch company cannot be independent, and all its property belongs to the head office.