I. Overview of branches
A branch is different from a subsidiary, and its main features are as follows:
(1) branches are established by affiliated companies according to law;
(2) The branch company does not have its own independent property, and it is economically accounted for with the affiliated company, and its liabilities in business activities are paid off by the affiliated company;
(3) The branch does not bear civil liability independently, has no articles of association of its own, and has no corporate decision-making and operating executive body in the form of a board of directors;
(4) There is no independent name for a branch, just add the word "branch" to the name of the head office.
Note: Although a branch company does not have an independent legal status, according to Article 49 of the Civil Procedure Law and Article 40 of the Opinions on Civil Procedure, a legally established branch company can be a party to a civil lawsuit, with litigation qualification and independent contracting capacity.
Second, the establishment of the branch
Branches are established by their affiliated companies according to law. Branches have the right to issue invoices if they want to register, but after receiving the invoices, they will be merged with the parent company in the end, otherwise local branches will not be able to carry out business. A branch has been cancelled, so you have to go to the industrial and commercial bureau to go through the formalities. Generally, the debt of a branch company is risk-free, and all of it is borne by the parent company, so the procedure is relatively simple. In addition, you can sue the branch company, but it will be paid by the parent company.
Third, the advantages of the branch.
The branch is easy to manage, and the tax is easy to manage, which is the biggest advantage of the branch. The general branch model needs to fully realize that the head office obtains resources, and branches infinitely dilute and amplify such resources. Because when a head office has core resources, such as licenses, such as business models, such as brands, such as intellectual property rights and so on. With this, we must use the same model, stupid system, standardized and reproducible system to rapidly expand the enterprise, so as to achieve efficient expansion and low risk. The efficiency of expansion is getting higher and higher, and the risk is getting lower and lower. Moreover, objectively, after applying the same system, all branches can learn from each other in management innovation, and any problems encountered by any branch can be cross-guarded.
Fourth, the disadvantages of the branch.
The disadvantage of the branch company is that the risks are superimposed on the parent company, and all the bad things done by the branch company are borne by the parent company. In addition, branches have no capital to enlarge and can only do things for a penny. Unlike subsidiaries, which have good additional income, they can make full use of leverage to give full play to their capital advantages.
Molecular company is in China.
Judging from the top 500 in China, the top 500 in China prefer to set up branches, and the number of branches is far more than that of subsidiaries. What facts does it reveal? The group found that the subsidiaries were risky and dared not set up more subsidiaries, so it had to set up branches. In addition, in China, many enterprises have many branches because China is vast and rich in resources. There are n branches in real estate, n branches in architecture and n branches in electrical appliances. Some branches are project branches, some branches are sales branches, and some branches are localized production companies. So, as you can see, many companies can't compete with Europe, and Europe is only a drive away, so the company doesn't have that many branches. On the other hand, why do China enterprises have more than 30 subsidiaries and more than 40 branches? In fact, branches are often a low-risk setting for a specialized subsidiary in the national operation process, from which we can clearly understand why there are so many branches in China.