Subsidiary enterprise: features of creation and management. Subsidiary company - goals of creation, financial activities, consolidated reporting and tax benefits

- This is a legally independent company created by the parent organization by transferring part of the property to it. The majority of decisions cannot be made by a subsidiary company without the consent of the parent company, therefore, they also share responsibility for the consequences of these decisions. However, there is one aspect: the subsidiary is not liable for the obligations of the parent.

Why is a subsidiary formed?

The main objectives of the formation of a subsidiary include:

• Increasing the level of specialization of a particular type of activity of the main company.

• The ability to more efficiently and rationally use the assets and resources available to the parent company.

• Opportunity to start economic activity "from scratch", that is, without the debts of the parent company.

• Risk minimization through diversification (subsidiary masters a new type of activity).

It is believed that in order to achieve these goals (and to be effective in general), a subsidiary must:

• Strive to increase the competitiveness of our products.

• Hire professional leaders.

• Try to minimize cooperative relations with the parent organization.

Signs of subsidiaries

Subsidiaries have the following characteristics:

• There is an element of legal influence (control) in the relationship between the parent and subsidiary organizations. The presence of this element means that the parent company is to some extent able to influence the decisions made by the subsidiary.

• A subsidiary has the status of a legal entity, which distinguishes it, for example, from branches and representative offices. This status gives rise to a number of other features - for example, a subsidiary may be located in the same place as the main one, which again is excluded for branches.

• A subsidiary may have any of the organizational and legal forms.

• Legislation distinguishes between the concepts of dependent and subsidiary enterprises. If the subsidiary assumes the presence possibilities participation of the parent in decision-making, then the dependent company cannot decide anything at all without the consent of the main one.

Subsidiary management

The managers of the parent company do not have the right to directly manage the employees of the subsidiary - the influence is exercised through the management bodies of the "daughter". The following is also important: any directive of the management of the parent company is only advisory in nature for the managers of the subsidiary and is implemented after their confirmation. However, as a rule, it is not difficult to lobby for such a directive, since the representation of the parent company in the management bodies of the subsidiary is decisive.

The parent company does not have to be the owner of a large block of shares in the subsidiary in order to be able to influence management decisions - such an opportunity is provided for by a special agreement that is signed when the subsidiary is established. The agreement regulates the following aspects:

• The scope of powers of the head of the controlled company.

• The procedure for the dismissal of the head and the appointment of a new one.

• The procedure for distributing the profits of the "daughter".

• The procedure for making a decision on the liquidation or reorganization of a subsidiary.

Is the parent company responsible for the subsidiary?

The Civil Code defines two cases of liability of the parent company for the debts of a subsidiary:

• The debts appeared due to the fact that the subsidiary complied with the directive of the parent company (supporting documents are required).

• Due to the fault of the main company, the subsidiary turned out to be insolvent.

A subsidiary is a separate legal entity with a full set of rights and obligations. Let's take a closer look at what a subsidiary is, how it works, and how it differs from a branch.

What is a subsidiary

A subsidiary is a full-fledged legal entity with a full set of rights and obligations inherent in the chosen organizational form. In its economic activities, it is guided by constituent documents, and bank accounts.

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What will help: the instruction contains a clear procedure for checking management reporting, a detailed analysis of each indicator characterizing the financial condition of the company.

What will help: establish interaction between the financial services of the management company and subsidiaries. It sets out the deadlines by which departments provide data for reports and budgets.

What will help: the regulation describes the main principles and methodology for the formation and approval of the budgets of the group's subsidiaries. Special attention is paid to the procedure for making changes to the approved plans. The use of this document in practice will help to reconcile the interests of all participants in the budget process.

How is a subsidiary different from a branch?

A branch, unlike a subsidiary, is completely deprived of autonomy, since it is considered only a separate division of the company. Its activities are regulated by the regulation on the branch, which is approved by the head office.

Table. Comparison: branch and subsidiary

"Daughter" or branch: what is more convenient and cheaper for the company

Your decision whether to open a subsidiary or whether a branch is enough, or even a separate division, depends on the tax consequences and asset protection. We have identified criteria by which it is easier to determine what to choose.

How to open a subsidiary

To register a "daughter" of the main company, you will need:

1. Form the statutory documents, the minutes of the meeting of the founders on the appointment of the director. Assure them at the notary for registration (five working days);
2. Conclude an agreement of intent or receive an information letter from the landlord to confirm the address of the location of the unit (five working days);
3. Register a legal entity in the funds and statistical bodies at the location of the subsidiary (five working days);
4. Make a seal of the newly created company (one working day);
5. Open a bank account in the usual way (three business days).

How to finance a subsidiary

The company can finance its subsidiary both at the expense of its own funds and at the expense of bank loans.

This can be done on your own in the following ways:

• make a contribution to the authorized capital in cash or property;
• transfer the necessary funds as an advance payment for future work (services);
• provide goods for sale with a significant deferred payment;
• give a loan.

When attracting loans, it should be taken into account that a subsidiary company at the beginning of its activity is most often unprofitable. The bank can either refuse the funds or offer them as collateral for another, more profitable enterprise of the company. It is possible to increase the authorized capital of the "daughter" to positive, but this is a costly and lengthy procedure, which also requires careful legal registration. In addition, the owners of many companies deliberately keep the share capital low, thereby reducing the risk of losses.

All settlement transactions between subsidiaries of the group are formalized only by business contracts, since in such cases they may be the basis for transferring funds or transferring assets.

Question: how to keep track of the money of subsidiaries?

Elena Ageeva, financial director of LLC "Golder Electronics"

It's time to solve the problems of the "daughter" if she:

• submits budgets, financial plans and management reports with delays to the parent company;
• regularly deviates from the approved cash flow budget;
• increases the loan portfolio without objective reasons;
• tightens;
• disrupts the terms of payment to counterparties;
• makes mistakes in data on debts, expenses, receipts.

For more information on what to do in such a situation, read the material. from .

How to manage and control a subsidiary

The management of the subsidiary is assumed by the CEO, who may be one of its co-owners. In addition, in a subsidiary company, you can create your own executive body, such as a board or board of directors. Since all operational activities are managed by their own management, and strategic decisions are made by the owners, this gives more autonomy to the subsidiary. Current control in it is based on regular monitoring of the implementation of approved performance targets and analysis of identified deviations. This is the best option, allowing, on the one hand, not to inflate the staff of managerial personnel, and, on the other hand, to quickly respond to the changing situation in the subsidiary.

Question: which is easier to manage - a branch or a subsidiary?

Natalia Alekseeva, financial director of GC "TRIERE", Ph.D. n.

We will use the following parameters for evaluation:

Efficiency of decision-making;

The risk of exceeding authority by the management of the unit;

Efficiency of movement of fixed assets and goods;

The degree of mobility of employees;

Number of functions performed on site;

The degree of workload of the staff of the parent company.

Each indicator is evaluated by points (from 1 to 5). The higher the score, the easier it is to manage the unit. We then compare the combined score for the two scenarios (see Table 1).

Table 1. Assessment of the degree of controllability of a branch and a subsidiary

Index			Subsidiary		Note
	Explanation	Evaluation, score	Explanation	Evaluation, score
Efficiency of decision-making	Decisions are made in the branch within the established powers or according to the regulations of the head unit		All key decisions are made by the general meeting of participants		Decisions for a branch are made more quickly than for a subsidiary
The risk of exceeding authority by the management of the unit	Headed by the head (head, director) of the branch, acting on the basis of a power of attorney		Headed by a director acting on the basis of the charter		For a branch, the risk of abuse of authority by officials is lower
Efficiency of moving property	The movement of property is documented by internal invoices, since in fact the movement of objects occurs between divisions of one legal entity without transfer of ownership		Only through contributions to the authorized capital or purchase and sale agreements. It is possible to transfer assets free of charge, but there is a risk of a tax audit		All transactions with subsidiaries are possible only under contracts. Significant tax disadvantage for a subsidiary – transactions are subject to tax administration (controlled transactions)
Goods movement speed	Movement of goods within a group of companies without transfer of ownership. Taxes do not arise, since there is no sale of goods		Only under a sales contract or commission with the occurrence and payment of VAT and income tax		The subsidiary has a clear price advantage, as the additional markup in the supply chain is less than that of the subsidiary
Efficiency of movement of employees	According to an additional agreement to the employment contract on changing jobs		Only through transfer or dismissal		Transactions for the branch are carried out according to a simplified procedure, do not require the conclusion of contracts, are less painful for the staff
Number of functions performed on site	Part of the auxiliary functions can be performed by the head unit		The performance of all auxiliary functions in the areas of: HR, lawyers, accounting, IT, etc. should be ensured, including through outsourcing. The parent unit may perform part of the functions of a subsidiary, but only under an agreement
The degree of workload of the staff of the parent company
Overall assessment criteria

If we evaluate seven criteria for the degree of manageability of divisions (see Table 1), we can conclude that it is easier to manage a branch (30 points) than a subsidiary (22 points).

For more information about what is more profitable for a subsidiary or a branch, see the decision from .

Accounting and management accounting in a subsidiary

The subsidiary maintains accounting and tax records, as well as being responsible to the tax authorities for the formation of reliable reports.

Video consultation: how to objectively evaluate the results of subsidiaries

How to liquidate a subsidiary

The liquidation of a subsidiary is a complex and lengthy process that involves carrying out all the procedures provided for in this case: making a decision by the owners or obtaining a court decision, creating a liquidation commission, notifying counterparties, settling debts, dismissing staff, etc. All this requires additional financial costs . The liquidation of the "daughter" is considered completed, and the legal entity - ceased to exist only after the filing of this

A subsidiary is an independent entity, the controlling stake or authorized capital of which is owned by the parent company. The subject has the right to control the supply, sale of products, transportation, but all its income belongs to the parent organization. The latter provides funds for needs: ensuring the continuity of production, paying salaries, and so on.

Subsidiary Features

"Daughter" is directly dependent on the state of the main subject. The latter actually ensures the activities of the organization and controls it. Consider the advantages of a subsidiary:

• All debts of the subsidiary are repaid by the parent organization.
• All financial responsibility rests with the parent company.
• The parent company must also provide a competitive advantage.

However, the child entity also has disadvantages:

• Lack of freedom to choose the production direction and other basic aspects of activity.
• Limited opportunities in technical development.
• It is difficult to accumulate funds for development, since all the capital belongs to the parent company.

Subsidiaries are usually created by large enterprises. They are needed for the distribution of activities.

Ways to create a subsidiary

To organize a subsidiary, a number of documents will be required: documentation of the main entity, the charter of the subsidiary, a decision to establish a company in writing. The parent entity must confirm the absence of debts at the present time. There are two ways to create a company.

First way

Consider the detailed algorithm for creating a subsidiary organization:

1. Drafting the articles of association of the subsidiary. The document must specify all the conditions for the existence of the subject.
2. If the fixed capital has several owners, it is required to draw up an agreement with the distribution of shares.
3. Drawing up by the founders of the protocol, which confirms the fact of the creation of the subject.
4. The director of the parent company must create a document that indicates the contacts and address of the "daughter".
5. Issuance of a certificate confirming the absence of debts.
6. Filling .
7. After completing all the listed documents and appointing the chief accountant, you need to provide papers to representatives of the tax authority in which the subject is registered.

If the main office has debts, it will not be able to adequately finance the subsidiary.

Second way

The first method involves the creation of a company, the second - the appropriation of an existing organization. That is, there is an absorption by mutual creation. Consider the algorithm of this procedure:

1. Choice of direction of production of a subsidiary company.
2. Development of the charter of the organization.
3. Development of own seal, bank details, registration of the address of the absorbed entity.
4. Appointment to the position of General Manager and Accountant. Coordination with them of all aspects of the activity.
5. Appeal to the State Chamber with an application and the main list of documents: a certificate from a banking institution on the account, characteristics of the general director and chief accountant of the "daughter", the charter with all signatures, a letter of guarantee, information about the founder in writing, copies of documents with payments (the last two documents must be certified).
6. Obtaining evidence that the subject has been registered.

After all these steps, the company can start its activities.

Responsibility of parent and subsidiary companies

A subsidiary is an independent entity. The organization owns both capital and property. She is not liable for the debts of the parent entity. However, the parent organization is liable for the debt of the "daughter" in some circumstances:

• Registration of the transaction at the direction of the parent company. This instruction must be documented. In this situation, both the "daughter" and the parent organization are liable in equal shares.
• "Daughter" because of the orders of the parent company was declared bankrupt. In this case, if the subsidiary does not have the resources to pay off the debt, the main office pays the balance.

In all other cases, the subsidiary is liable for its own debts.

Subsidiary management

The management of a subsidiary company is characterized by a number of features:

• A large number of control subjects.
• Irreversible impact on the "daughter".
• Independence of the organization in carrying out economic activities.
• Restrictions on the activities of the "daughter".

There are several models for managing a subsidiary. Let's consider them all.

Sole executive structure

Management through a sole body is the most common option. The sole body is the general director. It has the following responsibilities:

• Work on current tasks.
• Management of existing property (its value should not exceed 25% of the book value of assets).
• Management of the internal structure of the organization.

The CEO has fairly broad powers. In order for the parent company to track all management decisions, it makes sense to draw up a document that regulates all the rights and obligations of a person. Appropriate regulations can be included in the charter.

All key management decisions can be made by the board of directors, which includes the owners of the parent organization. This model is relevant with a small number of "daughters". Otherwise, the following problems may occur:

• Overload of board members.
• Difficulty in making decisions.

The board of directors is limited in decision making. If the council makes a decision that is not within its competence, it will not be valid in accordance with Articles 67 and 69 of Federal Law No. 208. The competence of the council can be expanded at the expense of the powers of the executive bodies. However, the latter should be included in the charter.

Management Company

Management of the "daughter" can be entrusted to the Criminal Code. The advantages of this method: centralization of management, operational distribution of resources, the ability to coordinate all actions. However, if there are many subsidiaries, it is difficult for one management company to keep track of them.

Governing body

The essence of the board is that the heads of the subsidiaries are members of the board of the main entity. An employment contract must be concluded with each of the board members. Features of the formation of the board are similar to the election of the general director. Members of the management team are elected by the meeting of shareholders or the board of directors.

Features of taxation

"Subsidiaries" and parent companies, from the point of view of taxation, are recognized as interdependent. This gives the fiscal authorities the right to monitor the correctness of pricing, to revise taxation in accordance with market prices. Since 2008, the "daughters" have received a big benefit in calculating income taxes. If the parent organization owns a controlling stake, the dividends received from the "daughter" are completely exempt from profits. The benefit will not apply if the subsidiary is registered in offshore zones.

You will need

• - documents of the main company;
• - charter of the subsidiary;
• - the decision to establish a subsidiary company;
• - an application form in the form p11001;
• - a document on the absence of debts of the main company.

Instruction

Draw up the charter of the subsidiary organization and write down all the necessary conditions in it. If there are several holders of the authorized capital, then you need to conclude a memorandum of association, where the main point will be the distribution of shares between them. As a rule, a subsidiary is an organization in which the parent company has at least 20% of the total capital (shares).

Draw up a protocol of founders or a sole decision on the creation. The document is signed by the chairman, secretary of the council of participants or the sole founder.

As a rule, any company being created (including a subsidiary) must provide a legal address. A document about this must be written by the director of the main organization.

The parent company should not have debts to the budget, tax authorities. In the registration chamber, the main company must request a letter indicating that there are no debts. Of course, the subsidiary is not responsible for the debts of the parent organization, it can recover from it the losses incurred through the fault of the main enterprise, but when creating a subsidiary, the absence of debts is necessary.

Fill out an application form p11001. Indicate in it the necessary information about the legal form, name, address, authorized capital, founders and sole executive body.

When creating an enterprise, submit the completed form along with the above documents, the certificate of state registration of the parent company, copies of the passports of the director of the subsidiary and the appointed chief accountant to the tax authority at its location. After registration, the subsidiary will be able to carry out activities: conclude contracts, have its own balance sheet, bank account and seal.

Sources:

• Registration of a subsidiary
• establishment of a subsidiary

In accordance with article 105 of the Civil Code of the Russian Federation, the subsidiary company is not created, but recognized in accordance with the agreement concluded by him with the parent company m. How to register such an institution?

Instruction

Select the line of business to be carried out by the subsidiary company your company. Please note that this activity may be different than that of the parent company.

Develop a charter. Subsidiary company- this is an independent organization that maintains its own documentation, but, despite this, is the property of the founder (in this case, your legal entity). The reorganization of the subsidiary will also depend entirely on you.

Register a legal entity. By law, a subsidiary company must have its own bank account, details of the organization, its seal. So the child company will be able to conclude contracts, regardless of the parent.

The concept of "subsidiary" was introduced in the Civil Code of the Russian Federation in 1995. Since then, the legal status of this market entity has been regulated by Art. 105 of the Civil Code of the Russian Federation. Changes were made in 2014. Today, the legal status of these organizations is determined by Art. 67.3 of the Civil Code of the Russian Federation.

Peculiarities

The organization will be recognized subsidiary if another partnership or society has the right to determine the decisions that are made by such a company. This link is based on one of the following circumstances:

• predominant participation in the authorized capital;
• on the basis of an agreement;
• otherwise legally (this provision is contained in the charter of a subsidiary company, representatives of the main company are included in the list of participants, etc.).

The legislator defined these conditions in a general way. For example, he did not approve the minimum size of the share that the parent company must have in the capital of a subsidiary.

The peculiarity of this type of organization is that they can exist in any organizational and legal form, for example, LLC, JSC, etc.

The specificity lies in the special relationship with the main societies, which are sometimes referred to as maternal. For example, they may influence the actions of subsidiaries.

Specially regulated material liability:

• the subsidiary is not liable for the debts of the parent company;
• the subsidiary and the main organization are jointly and severally liable for the debts that were formed under the transaction concluded as a result of the decision of the parent company;
• the parent company will be subject to subsidiary liability if its actions or decisions have led to the insolvency of the subsidiary.

These rules are enshrined in Art. 67.3 of the Civil Code of the Russian Federation.

Opportunities and responsibilities

A subsidiary is an organization that has its own capital and property. It concludes contracts and performs other functions as a full-fledged market participant.

In accordance with the Civil Code of the Russian Federation, a subsidiary is not liable for the debt of the parent company. She, in turn, can be brought to subsidiary or joint liability in some cases. For example, losses in a transaction initiated by the parent company are reimbursed by either the parent or subsidiary.

In this case, they are jointly and severally liable. More details are given in Art. 322 of the Civil Code of the Russian Federation. With joint and several liability the creditor may demand performance of obligations from all debtors jointly or from any of them separately. If one organization does not implement them, then he can apply to another.

Subsidiary liability of the parent organization occurs if its actions and decisions have led to the insolvency of a subsidiary. According to Art. 399 of the Civil Code of the Russian Federation in such a situation, principal debtor. It is the first requirement. The parent firm must repay that portion of the subsidiary's debt that it is unable to cover with its own assets.

Influence of the parent firm

The main feature of the subsidiary is that its decisions may be influenced by another organization. Such relationships are allowed for various reasons.

The parent company does not always have a predominant share in the authorized capital of the subsidiary.

Such relationships may contractual nature. For example, a controlled company receives the right to use technologies for the production of a certain object, but it must coordinate the sale of goods with the main company.

A subordination clause may be included in the charter of a subsidiary. Such companies have their own governing bodies, which means that control should have a certain consolidation. The charter may stipulate what types and amounts of transactions must be carried out with the approval of the board of directors or the general meeting.

As a result, the parent organization will not take part in operational management, but will be able to influence the adoption of strategically important verdicts. This rule is relevant for the main companies that have several subsidiaries.

Order and methods of opening

The creation of a subsidiary organization can be done in two ways. First - by registering a new company or partnership. In such a situation, a standard procedure is followed, which includes next steps:

• making a decision on the creation of a new market entity, drawing up a verdict in paper form (protocol);
• preparation of documents for registration, execution of an application for, drafting a charter;
• transfer to the tax office for registration of a new company;
• issuance of a verdict by the registration authority.

If the decision is positive, the subsidiary can start its activities, and if it is negative, it can file a complaint against the decision of the tax inspectorate for illegal refusal.

The second way is "absorption". This happens when a company created as an independent company becomes dependent on another market participant. Usually, this is due to financial difficulties.

There are quite a few examples of such "absorption". For example, the Volkswagen concern turned many auto-building companies in Europe into subsidiaries in a similar way.

Once the firms have mutually agreed on such a decision, they must the following actions:

• properly fix the procedure and tools by which the parent organization will be able to influence the subsidiary (for example, draw up an agreement or change the charter);
• the subsidiary must have all the necessary details, including its own current account, legal address, seal;
• it is necessary to select the managers of the subsidiary, including the director and chief accountant;
• apply to the state chamber with the necessary documents (certificate from the bank on the state of the account, characteristics for officials, information about the founders, fund, charter);
• obtain a certificate of registration of a subsidiary.

A subsidiary is often compared to branches and representative offices of legal entities. These concepts have common features, but at the same time are very different from each other.

Branches and representative offices are mentioned in Art. 55 of the Civil Code of the Russian Federation. This article presents legal definitions of such concepts:

• representation- a separate division of the company, which is located outside its location, represents the interests of the company and implements their protection;
• branch- a separate division of the company, which is located outside its location, exercises all its powers or part of them (including those assigned to representative offices).

In accordance with Part 3 of Art. 55 of the Civil Code of the Russian Federation and branches are not legal entities. They do not have their own property and management bodies. All this is provided by the main company or partnership. Managers manage branches or representative offices on the basis of a power of attorney. Information about subordinate structures must be specified in .

Thus, the main difference is that subsidiaries are independent firms that are full market participants. They have their own property, bear responsibility for their actions, and have their own governing bodies. The subsidiary operates on the basis of its charter.

Main firm Always will be liable for the obligations of its representative offices and branches. Any penalties apply to her. The parent organization always acts in court on behalf of its branches and representative offices.

At the same time, the law defines cases when it will be held liable for the transactions of a subsidiary. Moreover, it can be solidary and subsidiary, depending on the specific circumstances of the case.

The procedure for creating these forms of dependent market entities also differs. So, branches and representative offices are formed by the decision of the main organization. To create them, appropriate changes are made to the charter of the company.

Subsidiaries are founded in the same manner as other legal entities.

The decision to create company founders. A subsidiary company can start its activities when the tax office makes a decision on its registration.

Advantages and disadvantages

Among virtues subsidiaries are as follows:

• in case of bankruptcy, the debts will be repaid by the main firm;
• the parent organization is also responsible for the budget and expenses;
• the absence of tough competition, which is conducted not by a subsidiary, but by the main enterprise.

The main disadvantage of a similar form is the full accountability of the parent company. In such conditions, it can be problematic to develop an organization. The entire capital is managed by the parent company, which means that only it can decide on the possibility of financing certain areas. In addition, there is a risk of closing a subsidiary due to the liquidation of the main company.

For the parent organization, this form of interaction may be associated with additional costs, for example, in case of unprofitable transactions or insolvency.

So, a subsidiary is a popular way of organizing interaction between two market entities. Thanks to this model, smaller firms can stay afloat at the expense of large organizations. Those, in turn, expand even more, increasing incomes and the number of consumers.

Mergers and acquisitions of companies are described in detail in this video.