When a company has complete ownership of a secondary company the secondary company is a subsidiary company. There are many large brands and businesses across the world that include subsidiary companies as a major part of their business model.
Benefit of a Subsidiary Company
There are a few main reasons why a company would choose to open a subsidiary. These reasons can include brand recognition, fundraising, and selective disclosure purposes.
If the benefits and reasoning for setting up a subsidiary company resonate with you, I encourage you to reach out to an experienced business attorney such as myself at email@example.com to go over the specifics.
Holding Company vs. Parenting Company
When a company purchases a secondary company for the purpose of establishing a subsidiary, the primary company becomes a parent company. It is also sometimes called a holding company, depending on the purpose of the secondary company.
If you are curious about the difference, the two essentially the same thing with one tiny exception.