Editing Subsidiary (section)

{{Short description|Company owned or controlled by another company}}
{{Distinguish|Subsidiarity|Subsidy}}
A '''subsidiary''', '''subsidiary company''', or '''daughter company'''<ref>"daughter company = subsidiary: a company that is completely or partly owned by another company" Longman Business English Dictionary</ref><ref>{{cite web |url-status=live |url=http://www.investopedia.com/ask/answers/031915/what-difference-between-subsidiary-and-sister-company.asp |website=Investopedia |title=Subsidiary vs. Sister Company: What's the Difference? |archive-url=https://web.archive.org/web/20191220100956/https://www.investopedia.com/ask/answers/031915/what-difference-between-subsidiary-and-sister-company.asp |archive-date=2019-12-20 |quote=A subsidiary functions as a separate legal entity rather than a division of the parent company. It is sometimes referred to as a daughter company.}}</ref><ref>{{cite web|url=http://lexicon.ft.com/Term?term=daughter-company|title=Daughter Company Definition |publisher=Financial Times Lexicon |access-date=2013-09-29|archive-url=https://web.archive.org/web/20160625172156/http://lexicon.ft.com/Term?term=daughter-company|archive-date=2016-06-25|url-status=dead}}</ref> is a [[company (law)|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.<ref>{{cite web|url=http://smallbusiness.chron.com/difference-between-subsidiary-sister-company-35043.html |website=Small Business - Chron |first1=Alex |last1=Burke |date=October 26, 2018 |title=What Is the Difference Between a Subsidiary & a Sister Company?|access-date=2015-05-20|archive-date=2019-12-21|archive-url=https://web.archive.org/web/20191221111306/https://smallbusiness.chron.com/difference-between-subsidiary-sister-company-35043.html|url-status=live}}</ref><ref>{{cite web|url=http://www.merriam-webster.com/dictionary/subsidiary|title=Subsidiary Definition & Meaning |publisher=Merriam-Webster Dictionary |access-date=2015-01-15|archive-date=2016-08-20|archive-url=https://web.archive.org/web/20160820151745/http://www.merriam-webster.com/dictionary/subsidiary|url-status=live}}</ref> Unlike regional branches or divisions, subsidiaries are considered to be distinct entities from their parent companies; they are required to follow the laws of where they are incorporated, and they maintain their own executive leadership. Two or more subsidiaries primarily controlled by same entity/group are considered to be '''sister companies''' of each other.

Subsidiaries are a common feature of modern business, and most [[multinational corporation]]s organize their operations via the creation and purchase of subsidiary companies.<ref name="Drucker">{{cite journal|title=The Global Economy and the Nation-State|last=Drucker|first=Peter F.|date=September–October 1997|publisher=Council on Foreign Relations|journal=Foreign Affairs|volume=76|issue=5|pages=159–171|doi=10.2307/20048206|jstor=20048206|url=https://www.foreignaffairs.com/articles/1997-09-01/global-economy-and-nation-state |url-access=subscription |access-date=2016-10-14|archive-date=2019-10-31|archive-url=https://web.archive.org/web/20191031145717/https://www.foreignaffairs.com/articles/1997-09-01/global-economy-and-nation-state|url-status=live}}</ref> Examples of holding companies are [[Berkshire Hathaway]],<ref>{{cite web|url=http://www.berkshirehathaway.com/subs/sublinks.html|title=Links To Berkshire Hathaway Sub. Companies|publisher=Berkshire Hathaway Inc.|access-date=2013-09-29|archive-date=2020-04-15|archive-url=https://web.archive.org/web/20200415054247/https://www.berkshirehathaway.com/subs/sublinks.html|url-status=live}}</ref> [[Jefferies Financial Group]], [[The Walt Disney Company]], [[Warner Bros. Discovery]], and [[Citigroup]], which have subsidiaries involved in many different [[Industry (economics)|fields]]. More focused companies include [[IBM]], [[Xerox]], and [[Microsoft]]; they and their subsidiaries primarily operate within the [[Technology company|tech sector]]. These, and others, organize their businesses into national and functional subsidiaries, often with multiple levels of subsidiaries.