BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A company that is mostly owned by another company
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A company that is at least half-owned by a bigger company
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A company that is combined with another company to make a conglomerate
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A company of which less than 25% is owned by another company
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Detailed explanation-1: -What Is a Subsidiary? In the corporate world, a subsidiary is a company that belongs to another company, which is usually referred to as the parent company or the holding company. The parent holds a controlling interest in the subsidiary company, meaning it has or controls more than half of its stock.
Detailed explanation-2: -Can a Subsidiary Not Be Wholly-Owned? Subsidiaries can be both wholly-owned and not wholly-owned, With a regular subsidiary, the parent company’s ownership stake is more than 50%. A wholly-owned subsidiary, on the other hand, is fully owned by the parent.
Detailed explanation-3: -The company structure of a subsidiary If the parent simply owns a controlling interest in the subsidiary (50% or more), then the company is a subsidiary. If the parent owns less than 50% of another company, then that company is simply an associate of the parent company and not a subsidiary.
Detailed explanation-4: -A subsidiary is any organization that belongs to a parent or holding company. Learn how to form a subsidiary and the benefits it offers. The term subsidiary company refers to a separate entity that exists under the umbrella of another corporation, called a parent or holding company.
Detailed explanation-5: -A wholly-owned subsidiary is a company whose common stock is 100% owned by a parent company. Wholly-owned subsidiaries allow the parent company to diversify their product lines, streamline management, and possibly reduce risk. By its nature, a wholly-owned subsidiary has no obligations to minority shareholders.