The first is the control relationship.
Although the subsidiary is an independent legal person, it can engage in various business activities within its own business scope, but its autonomy is limited.
The parent company plays a leading role in the shareholders' meeting of the subsidiary, and the management policy and investment plan of the subsidiary are actually decided by the parent company.
The second is the investment relationship.
The parent company owns subsidiaries, which are basically realized through investment, except for a few controlled by agreement.
The investment relationship between parent company and subsidiary company can be divided into two situations.
The third is financial relations.
The fourth is the management relationship.
Although the subsidiary is an independent legal person, the parent company and the subsidiary have their own independent rights in production and operation, but in fact it is the relationship between management and being managed.
We can make use of the relationship between the parent company and its subsidiaries, especially the control relationship between them, such as manipulating the transfer pricing of subsidiaries, avoiding taxes, confronting public policies or evading their legal responsibilities.
Extended data:
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.
Most parent companies of multinational corporations are established by the capital of one country, but in a few cases, they may be jointly established by the capital of two or more countries.
As the decision-making center of the whole multinational company, the parent company is a legal person organization registered in the government agency of the home country, and is responsible for organizing and managing all the production and business activities of the multinational company at home and abroad. ?
Companies can be divided into parent companies and subsidiaries according to their different positions in the relationship between control and controlled.
The company that actually controls other companies is the parent company, and the company that is actually controlled by other companies is the subsidiary company.
They all have legal personality.
A parent company refers to an enterprise with one or more subsidiaries.
From the definition of parent company, we can see that the parent company requires two conditions at the same time:
First of all, there must be one or more subsidiaries, that is, they must meet the control requirements stipulated in the consolidated statement standards, be able to decide the financial and business policies of another enterprise, and gain benefits from the business activities of another enterprise.
The parent company can only control one subsidiary, and can also control multiple subsidiaries at the same time.
Second, the parent company can be an enterprise, such as a joint stock limited company or a limited liability company as stipulated in the Company Law, or it can be the main body, such as other organizations that are not in the form of enterprises but form accounting entities, such as funds.
References:
Baidu encyclopedia-parent company