The subsidiary is an independent entity with legal personality and independently bears civil liability according to law; Although the parent company may hold more than 50% of its shares or have a significant influence on the resolutions of its shareholders' meeting, the subsidiary company remains independent. Subsidiaries have an independent company management organization system and can independently carry out civil legal acts, including independent listing. In bankruptcy liquidation, the debts of the subsidiary company do not need to be repaid by the parent company. According to the company law, a subsidiary is different from a branch. The latter has no legal person qualification, and its civil liability is borne by the company, while the subsidiary has legal representative and can conduct independent accounting.
Organizational structure of subsidiaries:
1. Shareholder composition: the shareholders of subsidiaries can be wholly owned by the parent company, or jointly held by the parent company and other investors;
2. Management: subsidiaries usually have their own management, including the board of directors and senior management personnel, responsible for the daily operation and decision-making of the company;
3. Financial system: subsidiaries have independent financial systems, conduct independent accounting, and formulate their own financial policies and budgets;
4. Business operation: subsidiaries independently carry out business activities and own their own products or services according to market demand and their own characteristics;
5. Legal liability: As an independent legal person, the subsidiary company bears legal liability externally, and the parent company usually does not bear joint liability for the debts of the subsidiary company.
To sum up, as an independent legal person, a subsidiary has an independent management organization system and the ability to bear civil liability. Even if the parent company holds shares or has influence on the resolutions of the shareholders' meeting, the subsidiary company remains independent. In addition, when a subsidiary goes bankrupt and liquidates, its debts do not need to be repaid by the parent company. According to the company law, subsidiaries are obviously different from branches, and subsidiaries have legal personality and independent accounting ability.
Legal basis:
Company Law of the People's Republic of China
Article 14
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.