China Cities Business Incubation Service
Hotline: 86-755-82148419 or emailing to susiehu@citilinkia.com
A lot of foreign investors confuse the business type to access into China market.What are the difference between a branch and a subsidiary ?
We would like to have a brief introductions as follows:
1. a subsidiary company is a legal concept corresponding to the parent company. Subsidiaries are separate, distinct legal entities for the purposes of taxation, regulation, and liability, which differ from branches, as the branches office are businesses fully integrated within the parent company, and not legally or otherwise distinct from it;
2. a parent company and a subsidiary are separate entities and the subsidiary company is actually controlled by the parent company. According to the principle of majority voting of the shareholders meeting, the more shares possessed, the more decision making powers on the company's affairs. The parent company usually controls the subsidiary company through the ownership of shares in the subsidiary by the parent or control agreement. These shares give the parent the necessary votes to determine all major issues of the subsidiary, especially the composition of the board of the subsidiary. In addition to the equity control mode, the parties may also cause a company under the control of another company through the conclusion of certain special contracts or agreements, and thereby create relationship of the parent and subsidiary.
3. a subsidiary is a separate legal entity, whereas a branch is not a legal entity and has the same legal identity as its parent company. The liability of the shareholders of a subsidiary for the debts of the subsidiary is limited to the amount of the capital contributions they make or intend to make. In the case of a branch, there is no limit to the parent company’s liability.
Contact us For China Cities Business Incubation Service
If you have further queries, don’t hesitate to contact ATAHK anytime, anywhere by simply visiting ATAHK’s website www.3737580.net, or calling Hong Kong hotline at 86-755-82213974,86-755-82148419 or emailing to susiehu@citilinkia.com.