subsidiary - is an independent legal entity, separate from the parent (main) economic entity established by it with the help of the transfer of its assets (capital).As a rule, it plays the role of establishing the branch of its parent company.
Charter of the Company approved by its founder, which saves against him certain management, control and other administrative functions.The ability to monitor the activities of the subsidiary are guaranteed ownership of its shares and based on the principle of participation.
subsidiary exists in the difficult conditions of participation of the parent in its capital.That is, it is in a dependent state from the head office.
Prior to 1994, the term "subsidiary organization" is understood the company, the majority of fixed assets (capital) that belong to other companies.After the adoption of amendments to the Civil Code (Article 105) the meaning has changed.Now "subsidiaries" are understood as economic entities created by other companies due to the predominance of their participation in the authorized capital or having the ability to control and approve the decisions taken by such companies.In other words, the emphasis is on the right of the parent company to determine the decisions taken by the creation of its offices.
relationship between parent and subsidiary companies based on the principle of liability for the obligations of the parent company established its business.They are jointly and severally liable for the transactions entered into pursuant to the mandatory instructions parent company.In the case of bankruptcy of a subsidiary company through the fault of the parent, the subsidiary responsible for all obligations should bear the latter.
subsidiary company created through the establishment of a new organization, or release it from the structure of the parent company.
Typically, the decision to create it was adopted, the need to concentrate on the core areas of production in order to increase the competitiveness of the economic entity, the development of new markets.The new business units are generally more mobile, flexible and react quickly to changes in the market of a certain product.The most pressing issue is the establishment of units for large industrial enterprises.
As mentioned, there are two ways by which can be established wholly owned subsidiary of: reorganization of an existing company (including a spin-off) and the establishment of a new one.A more common method is its isolation in the reorganization of legal entities.In this case, it can be created by one or more companies without business interruption, the company that is going through reorganization.Selecting a method for creating depends on many factors.
In this play an important role and organizational aspects of the existing terms.The procedure for the reorganization of the legal entity is a difficult and time-consuming (it takes up to six months).The establishment of a new society - a simpler and less duration of the event (can be completed within two weeks).In addition, when choosing a method of creating a subsidiary accounted for by factors such as the establishment of decision-making body;notice to creditors;succession issues and others.In addition, there are organizational problems and tax risks associated with the payment of VAT and income tax.
Deciding on the way to set up a subsidiary company, related to the analysis of the advantages and disadvantages of each of these, taking into account the individual characteristics of the parent organization (the assets, production, etc.).
