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A subsidiary, subsidiary company, or daughter company [1] [2] [3] is a company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidiary company.
A corporate group is composed of companies. The general rule is that a company is a separate legal entity from its shareholders, that is the shareholder's liability for the subsidiary's debts is limited to the value of the shares, [4] and the shareholders cannot be required to perform the company's obligations.
If the parent is shown to have a long-standing and pervasive control over the affairs of the subsidiary, then there is a presumption that the parent was not acting in the best interests of the subsidiary. If the parent is unable to displace this presumption, then the parent is liable for all the obligations of the subsidiary. [4]
A conglomerate usually has a parent company that owns and controls many subsidiaries, which are legally independent but financially and strategically dependent on the parent company. Conglomerates are often large and multinational corporations that have a global presence and a diversified portfolio of products and services.
A numbered company is a corporation given a generic name based on its sequentially assigned registration number. For instance, an entity incorporated under the Canada Business Corporations Act and assigned the corporation number 1234567 would be entitled to register "1234567 Canada Inc." as its legal name. [ 1 ]
For example, the NYSE Listed Company Manual Rule 303A.01 requires that listed companies have a majority of "independent" directors. [73] " Independence" is in turn defined by Rule 303A.02 as an absence of material business relationship with the corporation, not having worked for the last three years for the corporation as an employee, not ...
A provision in the corporate charter to fend off hostile takeovers which requires a very large number of shareholders, between 67% and 90%, to approve major decisions of the company. Takeover A change in the control of a company, accompanied usually by a changed in the board of directors and senior management if the takeover is hostile.
A Form 10-K is an annual report required by the U.S. Securities and Exchange Commission (SEC), that gives a comprehensive summary of a company's financial performance. . Although similarly named, the annual report on Form 10-K is distinct from the often glossy "annual report to shareholders", which a company must send to its shareholders when it holds an annual meeting to elect directors ...