What is the relationship between enterprise groups and group companies (parent companies), subsidiaries and affiliated enterprises?

1. Relationship between parent company and subsidiary company. In an enterprise group, the parent company refers to a company that owns all or most of the shares and voting rights of its subsidiaries and controls their shares. A subsidiary is in a subordinate position because all or most of its shares are held by the parent company. However, the parent company and subsidiary company are independent legal subjects in law, and both have legal personality. The parent company owns all or most of the shares of the subsidiary because it invests in the subsidiary, so the parent company is essentially the largest shareholder of the subsidiary. The parent company can decide the production and operation activities of its subsidiaries or have a decisive influence on their operations or decisions through equity control in accordance with most decision-making rules determined by the company law.