What is a subsidiary?

The meaning of subsidiary refers to an independent company with legal personality that is actually controlled by another company by holding shares or agreements. Subsidiary is a legal concept relative to parent company. Both parties are legally qualified as legal persons and independently bear civil liabilities according to law. But there is actually a control relationship.

legal ground

Article 14 of the Company Law of People's Republic of China (PRC)

Companies can set up branches. The establishment of a branch company shall apply to the company registration authority for registration and obtain a business license. A branch company does not have legal person status, and its civil liability shall be borne by the company. A company may set up subsidiaries, which have legal personality and independently bear civil liabilities according to law.