Subsidiary
A subsidiary is a company owned in whole or in part by a parent company. The parent company owns most of the voting shares, giving the parent company control over what the subsidiary does and decides. Subsidiaries are often set up to enter specific markets, spread risk, or gain tax and legal advantages. They may operate in different industries or the same field of activity as the parent company.
Purpose and role of a subsidiary
The role of a subsidiary is to expand and diversify the parent company's business activities. It operates as a separate company within the legal protection of the parent company, often with (some) freedom in its day-to-day operations. Subsidiaries are used by all kinds of companies worldwide. From multinationals looking to enter new markets to smaller companies looking to expand without risking their core business. Many multinational companies have local subsidiaries in different countries to meet local legislation and market needs.
