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A subsidiary, subsidiary company, or daughter company [1] [2] [3] is a company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidiary company.
[3] [7] Subsidiarity is a general principle of European Union law. In the United States of America, Article VI, Paragraph 2 of the constitution of the United States is known as the Supremacy Clause. This establishes that the federal constitution, and federal law generally, take precedence over state laws, and even state constitutions. [8]
A corporate group is composed of companies. The general rule is that a company is a separate legal entity from its shareholders, that is the shareholder's liability for the subsidiary's debts is limited to the value of the shares, [4] and the shareholders cannot be required to perform the company's obligations.
s.c. (spółka cywilna): "civil law partnership", itself neither a proper legal entity nor a juridical person, as it is the partners (natural persons) who retain their separate statuses as entrepreneurs and legal entities, albeit bound by an agreement on the sharing of profits, losses and ownership of a business (common pool of assets).
The parent company–subsidiary company relationship is defined by Part 1.2, Division 6, Section 46 of the Corporations Act 2001, which states: [6] A body corporate (in this section called the first body) is a subsidiary of another body corporate if, and only if: (a) the other body: (i) controls the composition of the first body's board; or
Often referred to as an umbrella or parent company, a holding company is a business entity that holds the controlling stock in one or more subsidiary companies.
Subsidiaries are separate, distinct legal entities for the purposes of taxation, regulation and liability.For this reason, they differ from divisions, which are businesses fully integrated within the main company, and not legally or otherwise distinct from it.
Subsidiary legislation in Hong Kong is law made with powers delegated by a law enacted by the Legislative Council of Hong Kong. According to the Department of Justice, Hong Kong has a large volume of subsidiary legislation. [1] The making of subsidiary legislation is subject to the ambit of administrative law.