What is a subsidiary? In general, a subsidiary is a company that is controlled by another company. The company that is controlled is called the subsidiary and the company that controls the subsidiary is called the "parent." In most contexts, a parent-subsidiary relationship arises when one company has majority ownership of the shares of another company, especially a majority of the voting shares. The subsidiary may be a wholly owned subsidary (i.e., there are no shareholders of the subsidiary other than the parent) or it may be merely majority owned (i.e., there are other shareholders).
A subsidiary should be distinguished from a division of a company, which is usually a unit or business of a company that is contained with other divisions in the same legal entity. Subsidiaries should also be distinguished from situations where one company owns shares of another company without having majority control. In such cases, even though one company owns shares of a second company, the second company is not a subsidiary.