In addition to share control, the relationship between parent company and subsidiary company can also be formed by concluding some special contracts or agreements to make one company under the control of another company.
A subsidiary is legally independent from the parent company, but it has a controlling relationship with the parent company economically. The parent company carries out economic integration and forms an enterprise group. Its financial status and operating results are included in the consolidated accounting statements prepared by the parent company, but individual accounting statements still need to be prepared externally.
Extended data
1, China's Interim Provisions on Consolidated Accounting Statements stipulates that foreign-invested enterprises whose subsidiaries are controlled by other companies include foreign-invested enterprises whose parent companies directly or indirectly control more than half of their share capital and foreign-invested enterprises controlled by other means.
According to the majority voting principle of the shareholders' meeting, the more shares you own, the more you can make decisions on the company's affairs. But in fact, due to the dispersion of shares, as long as you own more than a certain proportion of shares, you can obtain the majority voting rights at the shareholders' meeting and obtain the controlling position.
3. Subsidiaries shall independently bear civil liabilities according to law. Subsidiaries are economically dominated and controlled by the parent company, but legally, subsidiaries are independent legal persons.
4. The subsidiary has an independent name and articles of association; Having an independent organization; Have independent property, be responsible for its own profits and losses, and conduct independent accounting; Carry out various non-governmental economic activities in its own name; Independently bear all the consequences and responsibilities brought by the company's actions.
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