(2) 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 affects the production and operation 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.
1. Individuals can simply judge whether it is a branch or a subsidiary from the following aspects.
Answer: If the name of the license is Business License for Enterprise as a Legal Person, it is a subsidiary; If it is a "business license", it is a branch.
B: Look at the company name. If it is a branch, its company name will have the words "XXX Branch".
C: the legal representative listed in the subsidiary license; The branch license is the person in charge.
D: the domicile of the subsidiary; Listed business premises of branches
E: The subsidiaries have their own registered capital, and the property belongs to the head office.
F: Check the information of this enterprise on Mingsuo.com or the website of the local administration for industry and commerce.
To sum up, from the information you provided, it should be a subsidiary.
2. The parent company and subsidiaries are independent enterprise legal persons and should be accounted for independently. Shareholders receive income from the two companies separately and cannot merge.
1, the main differences between subsidiaries and branches are:
1. Legal status: Although the subsidiary is actually controlled by the parent company, it has independent legal person status, obtained the business license of enterprise legal person in the industrial and commercial department, has its own company name and articles of association, and conducts business activities in its own name. Branches do not have independent legal personality. 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 company after 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.
2. The responsible subsidiary shall bear civil liability independently with its own property and shall not be associated with the parent company. Unless the investor (that is, the shareholder of the subsidiary) makes a false capital contribution or has withdrawn the capital, and the company's personality denies it, the creditor may not recover the unpaid part from the investor. When a branch company fails to perform its debts in the course of operation, the creditor may require the establishment of a company (head office) to undertake the repayment obligation. When filing a lawsuit, they can directly list the establishment of the company as * * * and ask the defendant to bear the responsibility. Special attention: this does not mean that the two are joint and several, but should be the same personality, and the head office should bear all the responsibilities.
3. Method of establishment A subsidiary company is established by one shareholder (one-person limited liability company) or two or more shareholders in accordance with the conditions and methods for the establishment of the company as stipulated in the Company Law; The head office applies to the local industrial and commercial department to set up outside its residence. As a branch of the company, it independently conducts business activities within the scope authorized by the company.
4. The parent company/head office's investment restrictions on subsidiaries' investment in other limited liability companies or joint stock limited companies. If the articles of association limit the total amount of investment or guarantee and the amount of individual investment or guarantee, it shall not exceed the prescribed limit. In principle, the head office's investment in branches is not restricted. Note: Paragraph 2 of Article 19 of the Law on Commercial Banks stipulates that the total amount of working capital allocated by a commercial bank to its subsidiaries shall not exceed 60% of the total capital of the head office.
2. The subsidiary is independent of the tax system, and the branch is attached to the parent company.
As far as China's company law is concerned, subsidiaries generally refer to companies invested by and controlled by the parent company. Generally speaking, the parent company owns a considerable number of shares in its subsidiaries and has strong control, but the subsidiaries themselves have independent corporate qualifications and independently bear civil liabilities according to law.
Generally speaking, if the parent company holds more than 50% of the shares, we call it' absolute holding'; If the holding ratio of the parent company is the highest among all shareholders but does not exceed 50%, we call it' relative holding'.
Corresponding to the subsidiary, the company law of our country stipulates that the branch refers to the organization established by the company outside its residence to engage in business activities. The branch does not have the independent enterprise legal person qualification.
Because of the different legal status of branches and subsidiaries, the legal significance of their participation in civil activities as the main body of civil activities is also very different. Mainly in the following aspects:
1, different establishment methods:
Subsidiaries are generally established by two or more shareholders, are independent legal persons, independently bear civil liabilities and independently carry out various business activities within their own business scope; A branch company applies for establishment by a local industrial and commercial department outside its domicile, which belongs to the branch company that established the company. Although it can also carry out business activities independently, it is within the scope authorized by the company. Generally speaking, this authorization is expressed by applying for the establishment of a branch office. In other words, applying for the establishment of a branch in the industrial and commercial department is regarded as the company authorizing the branch to carry out activities within the company's business scope.
2. The ways and names of industrial and commercial registration are different:
The subsidiary has obtained the business license of enterprise legal person in the industrial and commercial department; The branch company obtains the business license. The names of enterprises are also very different. The name of the subsidiary is xxx Limited Liability Company or xxx Limited by Share Ltd; The names of branches are all xxx branches of xxx Co., Ltd. in the end. Therefore, as long as we pay attention to the other party's license in business activities, we can find out its legal status.
3. The legal effect in litigation is different:
The basic spirit of China's legal person system is that legal persons only bear civil liability with their own property. In other words, the assets of subsidiaries determine their solvency; However, as far as a branch company is concerned, in addition to its own assets, all the assets of its established company can also bear the repayment responsibility.
As the subsidiary is an independent legal person, it can only pursue civil liability with its own assets. Unless the investor (that is, the shareholder of the subsidiary) makes false capital contribution or withdraws funds after capital contribution, the unpaid part cannot be recovered from the investor. However, the branch is not an independent legal person, and if it cannot perform its debts in the course of business development, the creditors may require the establishment of the company to undertake the repayment obligation. In litigation, the establishment of a company can be directly listed as * * * and the defendant is required to bear the responsibility.