Which term describes a company that is majority-owned by another company?

Which term describes a company that is majority-owned by another company?

• A. Affiliate
• B. Subsidiary
• C. Branch
• D. Parent company

Answer: (B)

A subsidiary is a company that is majority-owned and controlled by another company, known as the parent. Owning more than half of the subsidiary’s voting shares gives the parent the ability to direct major decisions while the subsidiary remains a separate legal entity with its own operations. An affiliate is typically a company with a minority stake or a less controlling relationship, not majority control. A branch isn’t a separate legal entity but an extension of the parent’s business in another location. A parent company is the owner, not the entity described.

A subsidiary is a company that is majority-owned and controlled by another company, known as the parent. Owning more than half of the subsidiary’s voting shares gives the parent the ability to direct major decisions while the subsidiary remains a separate legal entity with its own operations. An affiliate is typically a company with a minority stake or a less controlling relationship, not majority control. A branch isn’t a separate legal entity but an extension of the parent’s business in another location. A parent company is the owner, not the entity described.