In the corporate world, parent companies and subsidiaries often appear together, but they have distinct roles and characteristics. A parent company is like the big tree that shelters smaller plants. It usually has control over other companies through ownership of a majority stake. This means it can influence decisions and strategies of the companies it owns. Parent companies often exist to oversee multiple businesses and ensure they align with the overall corporate strategy.

On the other hand, a subsidiary company operates as one of those smaller plants. It’s a business entity that is controlled by a parent company. Even though a subsidiary has its own management team and operates independently, the parent company holds more than 50% of its shares. Think of it as a child company under the wing of the parent, receiving guidance and support while still having room to grow on its own.

Both structures play crucial roles in expanding business reach and managing diverse operations. While the parent company focuses on the bigger picture, the subsidiary handles specific markets or products. Together, they create a strong corporate structure 💪💼.