Subsidiaries

In business, a subsidiary is a company, corporation, or limited liability company which is controlled by a parent company. Generally, control of a subsidiary is granted due share ownership by the parent organization. For this reason, the parent company is not always necessarily larger or more powerful than the subsidiary. The parent company-subsidiary relationship provides some nice advantages for share-holders. One such benefit is that the two organizations are separate legal entities.

The contracts and details involved in the formation of a subsidiary can be very complicated, even to those familiar with the business world. If you are considering playing a role in the creation of a subsidiary business entity, the experienced Texas business attorneys at Slater Kennon & Jameson, LLP can make sure the process goes as smoothly as possible.

Advantages of Subsidiary Formation

Forming a subsidiary can provide a number of benefits to the parent company. Three major advantages include:

• Reducing “unrelated business taxable income”
• Legal liability reduction
• Real and perceived separation between associated organizations

Further benefits involve complicated areas such as lobbying tax laws. To discuss the gains your business may be able to experience by forming a subsidiary, you should contact an experienced business legal professional.

Contact Us

Running a business is a high-stress and complicated undertaking and serious decisions, such as whether or not to form a subsidiary organization, can be daunting. The Texas business lawyers of Slater Kennon & Jameson, LLP can help you make the best decisions for your business. Contact us at 512-472-2431.