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Please add a reason or a talk parameter to this template to explain the issue with the article. In the United States railroad industry, an operating subsidiary is a company that is a subsidiary but operates with its own identity, locomotives and rolling stock. Subsidiaries are a common feature of business life, and most multinational corporations organize their operations in this way. Subsidiaries are separate, distinct legal entities for the purposes of taxation, regulation and liability. One of the ways of controlling a subsidiary is achieved through the ownership of shares in the subsidiary by the parent. These shares give the parent the necessary votes to determine the composition of the board of the subsidiary, and so exercise control.
The parent and the subsidiary do not necessarily have to operate in the same locations or operate the same businesses. Not only is it possible that they could conceivably be competitors in the marketplace, but such arrangements happen frequently at the end of a hostile takeover or voluntary merger. In descriptions of larger corporate structures, the terms «first-tier subsidiary», «second-tier subsidiary», «third-tier subsidiary» etc. EU stipulates that control should be based on holding a majority of voting rights, but control may also exist where there are agreements with fellow shareholders or members. In certain circumstances, control may be effectively exercised where the parent holds a minority or none of the shares in the subsidiary. Power generally arises when the parent has rights that give it the ability to direct the relevant activities, i.
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The Companies Act 2006 contains two definitions: one of «subsidiary» and the other «subsidiary undertaking». The broader definition of «subsidiary undertaking» is applied to the accounting provisions of the Companies Act 2006, while the definition of «subsidiary» is used for general purposes. In Oceania, the accounting standards defined the circumstances in which one entity controls another. Look up subsidiary in Wiktionary, the free dictionary.
Wikimedia Commons has media related to Corporate subsidiaries by company. Investopedia: «A subsidiary company is sometimes referred to as a daughter company. Daughter Company Definition from Financial Times Lexicon». Subsidiary — Definition and More from the Free Merriam-Webster Dictionary». The Global Economy and the Nation-State». As with human family trees, each level above one level is the parent of the level below, so the term «parent company» in itself doesn’t necessarily refer to the company at the top of the tree, so here «ultimate parent company» has been used for that.