Subsidiary

Meaning:

A subsidiary is a company or entity that is controlled by another, typically larger, organization, known as the parent company or holding company. It operates as a separate legal entity but is owned either wholly or in majority by the parent company. Subsidiaries are established for various reasons, including expanding into new markets, diversifying business activities, or segregating certain operations for strategic or financial purposes. They often retain some degree of autonomy in decision-making but ultimately operate under the guidance and control of the parent company, which may influence their policies, strategies, and financial management.

Furthermore, subsidiaries play a crucial role in corporate structures, allowing parent companies to leverage resources, expertise, and market presence across different sectors or geographical regions. They provide a means for parent companies to manage risk, enhance competitiveness, and pursue growth opportunities while maintaining flexibility and adaptability. Subsidiaries may specialize in specific product lines or services, allowing the parent company to focus on its core business or achieve synergies through collaboration and integration. Overall, subsidiaries serve as integral components of complex corporate networks, contributing to the overall success and resilience of the parent organization.