Steps/methods
Limited company system
A limited liability company, also known as a limited company, refers to an enterprise legal person established by shareholders who meet the statutory conditions and are liable to the company within the limit of their capital contribution, and the company is liable to the company's debts with all its assets. According to the Company Law of China, the number of shareholders of a limited company is more than 2 and less than 50.
Limited liability company is the most common form of organizational structure, as shown in figure 1, which is a schematic diagram of the organizational structure of a limited liability company.
Branch system
A branch refers to a branch under the jurisdiction of the company in terms of business, funds and personnel. Not qualified as a legal person. A branch is a branch, which is not independent in law and economy, but a subsidiary of the head office. A branch company has no name, articles of association or property, and it shall bear legal liability for the debts of the branch company with the assets of the head office.
A branch is a branch under the jurisdiction of the head office, which refers to an organization established by the company outside its residence and engaged in activities in its own name. According to the Company Law, a branch company does not have the qualification of an enterprise legal person, and its civil liability shall be borne by the head office. Although there is the word company, it is not a real company and has no articles of association. The company name can only add the word "branch" after the name of the head office.
Branches are easy to manage and can be applied to standardized management enterprises.
What is an accessory system?
A subsidiary refers to a company whose shares are controlled by another company or actually controlled and dominated by another company according to an agreement. A subsidiary has the status of an independent legal person, owns all its own property, its own company name, articles of association and the board of directors, conducts business independently and assumes responsibilities. However, major decisions or major personnel arrangements involving the interests of the company still have to be decided by the parent company.
The strategy of a subsidiary is generally decided by the head office, and the business strategy can be formulated by the subsidiary itself.
There are two kinds of subsidiaries established by enterprises: holding subsidiaries and wholly-owned subsidiaries.
What's the difference between a branch and a subsidiary?
(1) Different legal person qualifications. A subsidiary is an independent legal person with its own independent name, articles of association and organizational structure. Conduct activities in its own name, and the creditor's rights and debts incurred in the course of operation shall be borne independently by itself. The branch does not have the qualification of enterprise legal person and has no independent name. Its name should be preceded by the name of the affiliated company, which is established according to law and is only a branch of the company.
(2) Different control methods. The parent company's control over its subsidiaries must meet certain legal conditions. Generally, the parent company does not directly control its subsidiaries, but more indirectly controls them, that is, it influences the management decisions of subsidiaries by appointing and dismissing board members and making investment decisions. However, branch offices are different. Its personnel, business and property are directly controlled by affiliated companies and engaged in business activities within the business scope of affiliated companies.
(3) Different ways to assume debts. As the largest shareholder of the subsidiary, the parent company is only responsible for the debts in the operating activities of the subsidiary to the extent of its capital contribution to the subsidiary; As an independent legal person, subsidiaries are liable for operating liabilities with all their property. Because the branch company does not have its own independent property, it is accounted for together with the affiliated company economically, so the liabilities in its business activities are paid off by the affiliated company, that is, the affiliated company is liable for the debts in the operation of the branch company to the extent of all its assets.