Subsidiary Agreements

A subsidiary, subsidiary or subsidiary[2][3] is a company owned or controlled by another company called parent, parent or holding company. [4] [5] The subsidiary may be a limited liability company, company or corporation. In some cases, it is a public or public enterprise. In the U.S. rail industry, an operating subsidiary is a subsidiary that is a subsidiary, but operates with its own identity, locomotives and rolling stock. On the other hand, a non-operating subsidiary would exist only on paper (i.e. stocks, bonds, constituent assets) and would use the identity of the parent company. Control may be directly (for example.B. a parent company directly controls the subsidiary of the first animal) or indirectly (z.B. an ultimate parent company indirectly controls the second and lower level of the subsidiaries through first-tier subsidiaries).

A subsidiary can only have one parent company; Otherwise, the subsidiary is in fact a joint agreement (joint venture or joint venture) over which two or more parties have joint control (IFRS 11, paragraph 4). Common control is the contractual sharing of control of an agreement that exists only when decisions concerning the activities concerned require the unanimous agreement of the parties who share control over it. Under Law 1159, a company is a „subsidiary” of another company, its holding company, if that other company: the second definition is broader. According to the Companies Act 2006 S.1162, a parent company is a parent company compared to another company, a subsidiary, if: in the descriptions of large business structures, the terms „first-tier-tochtergesellschaft,” „second-tier subsidiary,” „third-tier subsidiary,” etc., are often used to describe several levels of subsidiaries. A subsidiary of the first level refers to a subsidiary/subsidiary of the parent company,[Note 1][9], while a second-tier subsidiary is a subsidiary of a first-class subsidiary: a „granddaughter” of the main parent company. [10] Therefore, a third-tier subsidiary is a subsidiary of a second-class subsidiary – a „great-granddaughter” of the main parent company. One of the possibilities of controlling a subsidiary is obtained by the ownership of the parent company in the subsidiary. These actions give the parent company the votes necessary to determine the composition of the subsidiary`s board of directors and thus exercise control. Hence the common assumption that 50% plus a share is enough to create a subsidiary.

However, there are other ways to control and the precise rules on the necessary control and how it is obtained can be complex (see below). A subsidiary may have subsidiaries of its own and they may in turn have their own subsidiaries. A parent company and all its subsidiaries combined are called companies, although this concept may also apply to cooperating companies and their subsidiaries with different holdings. Subsidiaries are separate and separate legal entities for the purposes of taxation, regulation and liability. This is why they differ from divisions that are fully integrated into the main business and do not differ, legally or otherwise, from the main enterprise. [8] In other words, a subsidiary may take legal action and be subpoenaed separately from its parent company, and its obligations are generally not the obligations of its parent company.