Parent company: Difference between revisions

Latest revision as of 21:47, 2 March 2025

A parent company is a company that owns enough voting power in another firm (or subsidiary) to control management and operations by influencing or electing its board of directors. The definition of a parent company differs from jurisdiction to jurisdiction, with the definition normally being defined by way of laws dealing with companies in that jurisdiction.

When an existing company establishes a new company and keeps majority shares with itself, and invites other companies to buy minority shares, it is called a parent company. A parent company could simply be a company that wholly owns another company, which is then known as a "wholly owned subsidiary".

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-A '''parent company''' is a [[company]] that owns enough [[voting interest|voting power]] in another firm (or ''[[subsidiary]]'')
+A '''parent company''' is a company that owns enough voting power in another firm (or ''subsidiary'')
-to control management and operations by influencing or electing its [[board of directors]].<ref name=":0">{{Cite web |title=Subsidiary {{!}} Definition, Meaning, Parent Company, & Holding Company |url=https://www.britannica.com/money/topic/subsidiary |access-date=2023-09-14 |website=Britannica Money  |language=en}}</ref> The definition of a parent company differs from [[jurisdiction]] to jurisdiction, with the definition normally being defined by way of [[Corporate law|laws dealing with companies]] in that jurisdiction.
+to control management and operations by influencing or electing its board of directors. The definition of a parent company differs from jurisdiction to jurisdiction, with the definition normally being defined by way of laws dealing with companies in that jurisdiction.
-When an existing company establishes a new company and keeps majority shares with itself, and invites other companies to buy minority shares, it is called a parent company.<ref name=":0" /> A parent company could simply be a company that wholly owns another company, which is then known as a "[[wholly owned subsidiary]]".
+When an existing company establishes a new company and keeps majority shares with itself, and invites other companies to buy minority shares, it is called a parent company. A parent company could simply be a company that wholly owns another company, which is then known as a "wholly owned subsidiary".