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Simple English definitions for legal terms
Subsidiary
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A quick definition of Subsidiary:
A subsidiary is a company that is controlled by another company. This means that the parent company owns more than half of the subsidiary's shares and has the power to make important decisions for the subsidiary. Think of it like a big brother or sister who has a say in what their younger sibling does.
A more thorough explanation:
A subsidiary is a company that is controlled by another company. The controlling company owns more than half of the subsidiary's shares, which gives it the power to make important decisions about the subsidiary's operations.
For example, if Company A owns 60% of the shares of Company B, then Company B is a subsidiary of Company A. Company A can make decisions about Company B's finances, management, and other important matters.
Another example is Disney, which owns many subsidiaries such as Pixar, Marvel, and Lucasfilm. Disney has controlling shares in these companies, which allows it to make decisions about their operations and strategies.
These examples illustrate how a subsidiary is a separate legal entity that is controlled by another company. The controlling company has the power to make important decisions about the subsidiary's operations, but the subsidiary still operates as a separate business.