We often hear about children and branches, and what is the difference between a subsidiary and a branch company? What is the connection between them?Let's take a look at the difference between the subsidiaries and the branches":
1.Different ways of setting up：
The subsidiary company is established by the shareholders of the company in accordance with the provisions of the company law. It should meet the requirements of the company law for the establishment of the company and the way of investment;
A branch company applies for the establishment of a branch of an enterprise in a local industrial and commercial organization in the domicile of a branch company.
2.Legal status is different：
Subsidiary in the law is an independent legal personality, has an independent name, organization and company charter, the external use of their own name to engage in business activities；
The branch company does not have the legal person qualification, does not have the independent name, the organization and the company charter, in the name of holding the branch of the head office to engage in the business activity.
3.The control mode is different:
The parent company usually does not directly control the subsidiary, but through the investment decision-making, the appointment of subsidiaries of the board of directors, etc. to influence the subsidiary's production and business activities;
Branch of the personnel, property, business is the direct control of the head office, must be in the head office of the business scope of business activities.
4.Different ways of taking responsibility for debt:
Subsidiaries as a company with an independent legal person, the subsidiary of all the property to the company's debt liability;
Because the branch does not have its own independent property, finance and Corporation unified accounting, so the branch management by the corporation for the repayment of debt, that is the total of all of its property company limited branch in business activities of liability.
5.The legal provisions of the scope of business are different:
As an independent legal person organization, a subsidiary company has its own legal person business license, which kind of main business is needed, and only need to apply independently, so the scope of operation of the subsidiary company is not limited to the scope of operation of the parent company;
The business scope of the branch will be subject to the head office. According to China's "Company Law" of the relevant provisions of the branch's business scope can not exceed the head office's business scope.
6.The business license is different:
Subsidiary to receive the business license is the legal person, the name of the legal representative above the name;
Branch office is responsible for the business license.
7.The name is different:
The name of the subsidiary needs to be pre-approved and not subject to the parent company's name;
The name of the branch office set up by the branch company shall not be pre-approved, but its name shall be the name of the enterprise to which it belongs, and the words "branch", branch, branch and other words shall be accompanied by the trade and the location of the branch Administrative division name or place name.
8.Accounting is different:
Subsidiaries as an independent legal entity, independent accounting is necessary;
There is no hard and fast regulation for the accounting of the branch, which can be independently calculated or independent.
9.Different labeling of product packaging:
Subsidiaries in the product packaging is necessary to mark their own company's residence and name;
A company may label its domicile, name, or company's domicile, name, or name of the company.