What is the definition of a subsidiary company?

A subsidiary company is defined as a company that is owned and controlled by another company, often referred to as the parent company. This relationship allows the parent company to exert significant influence over the subsidiary's operations and decision-making processes. The parent company holds a majority of the subsidiary's shares, which typically grants it the authority to influence or directly control business strategies, financial decisions, and corporate governance.

The key characteristic of a subsidiary is this ownership arrangement, which differentiates it from independent companies or other forms of business entities such as joint ventures or fully public companies. While the subsidiary may operate with some level of autonomy in its day-to-day operations, the overarching control rests with the parent company, allowing for strategic alignment and resource sharing between the two entities.