What would we call a company like that?

Question

Dear fellow users,I'm currently trying to figure out what one could call a company that belongs to a parent company and:a) A can take decisions on their own and engage in international construction engineering projects because it owns all the necessary certificates and qualifications for construction of highways and railwaysb) B is more dependant on the parent company as it doesn't own the necessary certiticates and qualificationsI'd think that A might be a subsidiary... and B just a branch but I'm not really familiar with this kind of terminology...Kind regards and many thanks for your help!

Perfect Stranger · Accepted Answer

Any ideas Dear Helpers <img class='emoticon' style='Width:19px;Height:19px;' data-delaysrc='https://uat-englishforward-forums-backend.s3.us-west-2.amazonaws.com/Emoticons/1.gif' src='https://uat-englishforward-forums-backend.s3.us-west-2.amazonaws.com/Emoticons/1.gif' alt='Emotion: smile'/> ?

Perfect Stranger · Answer

Any insight would be highly appriciated...

Perfect Stranger · Answer

If anyone can help, I'd be much obliged.

AlpheccaStars · Answer

The terms "parent company" and "subsidiary" are fairly complex legal definitions. The precise terminology depends on the country in which the parent company is domiciled. Generally, it refers to two independent companies. The daughter companies may be established in different countries than the parent, and subject to different tax laws.. They may have their own stock (so there are minority stockholders' interests.) Or all the stock may be owned by the parent company.

A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a government or state-owned enterprise. The controlling entity is called its parent company, parent, or holding company.
http://legal-dictionary.thefreedictionary.com/subsidiary

A division is simply a part of a company, that is segregated according to business purposes. There is no separate incorporation, stock, or ownership of a division. A branch is usually a part of a division or group. For example, different branch offices are located in different cities.

The organization of a big company often has to be changed by management as they buy other companies, sell parts of their own company, or restructure for better control.

Here is an example of Cisco Systems and several reorganizations.
http://marketingstrategicmanagement.blogspot.com/2009/10/cisco-systems-analysis-on.html

Perfect Stranger · Answer

Thanks Alphecca,

The weird thing is that the companies controlled by the parent company operate independently when it comes to the local market projects (i.e. projects undertaken in China) BUT... they don't have this kind of authority when it comes to overseas markets... They need to be represented by the parent company if they want to take part in any overseas projects. I wanted to call them limited autonomy subsidiaries but the company's management said that's too long...

AlpheccaStars · Answer

Why not just say "local subsidiaries" or "restricted subsidiaries"?

Perfect Stranger · Answer

restricted subsidiary sounds good... thanks Alphecca! but, does it express what needs to be expressed by such a title according to what I said in my previous post? I'm not very familiar with business law/corporate law English nomenclature...

here's what I've just found:

In finance, a restricted subsidiary is a company that is purchased by a parent company through the use of a loan. The parent company is required to perform certain actions to maintain the subsidiary (called a covenant), as well as repay the loan. If not, the subsidiary is subject to be taken by the bank.

Read more: What Is a Restricted Subsidiary? | eHow.com http://www.ehow.com/info_8766202_restricted-subsidiary.html#ixzz26JO09BBs

AlpheccaStars · Answer

Perfect Strangerrestricted subsidiary sounds good... thanks Alphecca! but, does it express what needs to be expressed by such a title according to what I said in my previous post?

There is no legal term that expresses exactly what you described. Legal definitions are different in each country. Just call it a local subsidiary, and in the articles of incorporation specify the relationships and obligations of that subsidiary..

What would we call a company like that?

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