Wholly Owned Subsidiary Company

A wholly-owned subsidiary is a organization with 100% stocks held through any other corporation, the parent corporation. Although a corporation may also turn out to be a wholly-owned subsidiary thru take over by the parent company or cut up off from the parent company. The parent company holds a normal subsidiary from 51% to 99%.

If decrease expenses and dangers are desirable, or if whole or majority possession can't be obtained, the parent company may create a subsidiary, associate, or joint venture wherein it might own a minority stake.

As the parent company owns all of the stocks of a wholly-owned subsidiary, minority shareholders aren't present. The subsidiary works with the parent company's approval and might or might not have direct enter to the activities and control of the subsidiary. That could flip it into an unconsolidated subsidiary.

A wholly-owned subsidiary, for example, perhaps in a country apart from that of the parent company. The subsidiary most likely has its own government structure, products, and customers. Having a wholly-owned subsidiary may also allow the parent company to sustain operations in exclusive geographic regions and markets, or separate sectors.

These elements assist to manage up with the modifications in the market or geopolitical and trade practices.

• Ability to exercising manage or permit organization autonomy
• Strategic partnership among parent and subsidiary operations (Vertical/Horizontal Integration)
• Increased sources for the subsidiary (financial, knowledge, assist staff, marketing, etc.)
• Regulatory risks (Securities Law, Antitrust Law)
• Increased complexity of management
• Potential undue affect through parent over subsidiary
• Cultural discrepancies among companies