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What is the difference between a branch and a subsidiary

What is the difference between a branch and a subsidiary

To understand the difference between a branch and a subsidiary, it is possible to look into the Civil Code. It is painted in detail the features and powers of these departments parent company.

Businessman before expanding its activities should understand that the discovery of a division will be more profitable.


Many businesses do not see the difference betweenthe opening of a branch, representative office or subsidiary. Meanwhile, it is very palpable. Before making a decision on the reorganization of the existing production, it is necessary to understand the terms and choose the most acceptable form of expansion.

What branch of the enterprise?

This word is called a separate divisionlegal entity that gives it the full range of powers or just part of it. The branch of a business or organization may be in a foreign country. In this case, it should be coordinated all aspects of its activities with the laws of this country, as it may significantly differ from the domestic.
The branch shall be included in a singlestate register, but it is not a legal entity. He is in complete subjection to the parent company management and exercises its powers only on the basis of power of attorney. The fact that such a "separate unit", and the branch office, according to Art. 95 of the Civil Code. The Civil Code spelled out all the steps of opening a branch.

What is a subsidiary?

This is a separate independentunit, which is formed by the transfer of the head enterprise of the property in full economic control of the subsidiary. Its founder specifies the Charter of the subsidiary and ownership of the transferred property.
This form of management for the head officeIt is advantageous in that it frees itself from the obligation to manage document on this subject and give the main content of reports on the work of its subsidiary units. The primary responsibility for its operations lies with the parent company appoints an executive. It is engaged in the organization of work, "promotion" division, in charge of all current operations. But it is obliged to coordinate all of the major costs and solutions headquartered.
Thus, we conclude: subsidiary - a more independent entity, endowed with much greater power by the founder, which has the property transferred to it by right of ownership. The branch office capabilities, both in terms of self-management, and conduct much more limited document.

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