What is the difference between a parent company and a subsidiary?

The parent company has at least a 50% stake in a subsidiary and a 100% stake in a wholly-owned subsidiary. Subsidiaries generally answer to their own management teams and directors while parent companies are normally in control of wholly-owned subsidiaries.

What is a parent company?

The parent company is typically a larger business that retains control over more than one subsidiary. Parent companies may be more or less active with respect to their subsidiaries, but they always hold some degree of controlling interest.

What is a wholly owned subsidiary?

The parent holds a controlling interest in the subsidiary company, meaning it owns or controls more than half of its stock. In cases where a subsidiary is 100% owned by another company, the subsidiary is referred to as a wholly owned subsidiary .