Business Law

Ask a Business Lawyer. Get Business Law Questions Answered ASAP.

Ask a Lawyer, Get an Answer ASAP!

Subsidiary Company Questions

What is a subsidiary company?

A subsidiary company is a company that is entirely or partially owned and wholly managed by a different company that owns over half of the subsidiary's stock. The subsidiary can be any of the business models a corporation, company or limited liability company.. In a few situations, it is a government or state-owned enterprise. The controlling entity is known as the parent company, parent, or holding company. Listed below are five of the top Subsidiary Company questions that have been answered by Experts.

If the Environmental Protection Agency discovers a leak at a site can any of the private parties be forced to pay for the clean up?

The Environmental Protection Act (EPA) is comprehensive. Transferring the operation of a hazardous waste site without the approval of the EPA is a violation of EPA regulations. If the EPA can show that its operation contributed to the leak after pinpointing the leak, then it can be held liable for the cleanup.

What can someone do to keep their current California general contractors license number and change their small construction company, an s corporation, to a sole proprietorship? What steps would they take, and which forms, specifically, would someone need to fill out?

What the individual needs to do is make a subsidiary to carry on the company. Once the subsidiary is formed, move the license to the subsidiary and obtain a fresh license for the original company. Then place all new business in the wholly owned subsidiary and do all existing work in the present business. After the license transfer is complete, the stock from the subsidiary can be distributed to the shareholders of the existing company.

How does someone form a subsidiary in California?

Under Banker Code 548(a)(1), the bankruptcy trustee can avoid any transfer of assets that is intended to defraud, hinder or delay a creditor claim that arose within 2 years of the date of filing. Additionally, California Civil Code 3429 et. seq., contains a substantially similar law that can be used by a creditor outside of bankruptcy (and the bankruptcy trustee inside of bankruptcy), and which extends back 4 years from the date that the creditor/trustee files suit to recover. By making a subsidiary business and moving possessions/shares into it, except the individual’s subsidiary is ready to compensate "rationally equal value" for those possessions/shares, the individual would have made a classic civil fake transport scenario, which would authorize the individual’s creditors to follow the individual right into the subsidiary, just as if it did not exist.

Can a US company start a C-Corp and not have it be a subsidiary?

The business is not obligated to a subsidiary of the owner company. Companies own additional companies and not every one of the companies they own are subsidiaries of the major company. A subsidiary is one that shares funds or human resources, however if there is not any sharing of funds or human resources then it is not a subsidiary.

If someone is starting, an online magazine and they want to do so under a parent company that will produce multiple online magazines?

It is necessary it register some company prior to starting. It is usually the best to form an LLC and then the individual could form subsidiary Limited Liability Companies (LLC) for the single magazines later on as they build up. The individual’s parent LLC could register and keep each of the trademarked names and simply give out licenses to the subsidiaries to employ those names. The individual could as well do the same thing by making the individual’s company as a corporation rather than a LLC. When the business is still on the small scale operations the LLC is to manage since the taxes of the LLC flow through to the owner to claim on their personal taxes and the record keeping and requirements are easier to manage.

Subsidiary Company can be very stressful and can cause tension. When dealing with subsidiary company additional questions might arise. Such as: subsidiary companies, investment in subsidiary, and setting up a subsidiary. Individuals can get more legal knowledge about subsidiary company by asking the Experts.
Please type your question in the field below

3 verified Business Lawyers are online now

Business Lawyers on JustAnswer are verified through an extensive 8-step process including screening of licenses, certifications, education and/or employment. Learn more



Doctoral Degree

1864 positive reviews
Dimitry K., Esq.


Doctoral Degree

1611 positive reviews
MShore Law


Doctoral Degree

1233 positive reviews
See all Business Lawyers
JustAnswer in the news:
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
Web sites like
...leave nothing to chance.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.