Subsidiary

Subsidiary refers to a company that is controlled by another company, known as the parent company or Holding Company. The parent company owns a majority (more than 50%) of the subsidiary’s voting Stock, allowing it to exert control over the subsidiary’s operations and decisions.

Examples:

• XYZ Corp. is a parent company that owns 80% of ABC Ltd. In this case, ABC Ltd. is a subsidiary of XYZ Corp.
• In the automotive industry, Toyota owns Lexus, making Lexus a subsidiary of Toyota Motor Corporation.

Cases:

• Case 1: In 2018, Facebook acquired Instagram, resulting in Instagram becoming a subsidiary of Facebook.
• Case 2: Procter & Gamble owns several brands like Tide and Pampers, which operate as subsidiaries under the Procter & Gamble umbrella.