SUBSIDIARIES Meaning and
Definition
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Subsidiaries are entities that are under the control and ownership of another larger entity, often referred to as the parent company or the holding company. These entities are distinct legal entities that operate independently of their parent company, primarily formed to carry out specific business activities or pursue particular business interests.
Subsidiaries are usually established to serve as extensions or branches of their parent company, operating in different geographic locations or engaging in different markets or industries. They can be wholly or partially owned by the parent company, with the parent company holding a majority stake. In some cases, subsidiaries may also be formed through acquisitions or mergers with existing companies.
While subsidiaries are legally separate from their parent company, they are still influenced and controlled by the parent company through common ownership. The parent company typically exercises control over the financial and operational decisions of its subsidiaries, often appointing their board of directors and setting strategic objectives.
Subsidiaries can offer several benefits to their parent company, such as increased market presence, access to new markets, or more extensive product offerings. They can also provide a level of financial insulation and limited liability protection to the parent company, as the responsibility for the subsidiary's debts and obligations generally falls on the subsidiary itself.
In summary, subsidiaries are separate legal entities that are owned and controlled by a parent company. They operate autonomously within the framework set by the parent company and serve as extensions of the parent company's business interests.
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Other Common Misspellings for SUBSIDIARIES
Etymology of SUBSIDIARIES
The word "subsidiaries" is derived from the Latin word "subsidiarius", which is formed by combining "subsidium" and the suffix "-arius".
"Subsidium" itself stems from the Latin prefix "sub-" meaning "under" or "below", and the noun "sidus" meaning "star" or "constellation". The original meaning of "subsidium" in Latin referred to the support provided from troops stationed in the rear or reserve army.
Over time, the term "subsidiaries" has evolved to refer to companies or organizations that are controlled or owned by a parent company or organization.
Similar spelling words for SUBSIDIARIES
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