Business Entities

Subsidiary

A subsidiary is a company controlled by another company, usually through ownership of voting interests.

Quick answer

A subsidiary is a company controlled by another company, usually through ownership of voting interests.

It matters because group structures affect legal separation, accounting, and tax planning.

A parent company may own a wholly controlled subsidiary for a separate product line or state operation.

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Plain-English Definition

What Subsidiary means

A subsidiary is a company controlled by another company, usually through ownership of voting interests.

Why it matters It matters because group structures affect legal separation, accounting, and tax planning.
Simple example A parent company may own a wholly controlled subsidiary for a separate product line or state operation.
Related Questions

Questions people ask about Subsidiary

What does Subsidiary mean?

A subsidiary is a company controlled by another company, usually through ownership of voting interests.

Why does Subsidiary matter?

It matters because group structures affect legal separation, accounting, and tax planning.

What is a simple example of Subsidiary?

A parent company may own a wholly controlled subsidiary for a separate product line or state operation.

When should I ask a CPA about Subsidiary?

Ask a CPA when the term affects how your business is taxed, how owners are paid, or whether an election could reduce tax.

How is Subsidiary different from Holding Company?

Subsidiary means A subsidiary is a company controlled by another company, usually through ownership of voting interests. Holding Company means A holding company is a company formed to own interests in other businesses or assets rather than run the main operating activity directly. The difference is that they apply to different tax, accounting, or business situations and should not be treated as interchangeable.

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