Australia The parent company–subsidiary company relationship is defined by Part 1.2, Division 6, Section 46 of the
Corporations Act 2001 (Cth), which states: A
body corporate (in this section called the first body) is a subsidiary of another body corporate if, and only if: :(a) the other body: ::(i) controls the composition of the first body's board; or ::(ii) is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a
general meeting of the first body; or ::(iii) holds more than one-half of the issued share capital of the first body (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or :(b) the first body is a subsidiary of a subsidiary of the other body.
Canada Toronto-based lawyer Michael Finley has stated, "The emerging trend that has seen international plaintiffs permitted to proceed with claims against Canadian parent companies for the allegedly wrongful activity of their foreign subsidiaries means that the corporate veil is no longer a silver bullet to the heart of a plaintiff's case." In Canada, holding companies are commonly used to facilitate
tax-free intercorporate dividends, allowing dividends to flow from an operating subsidiary to a parent holding corporation without immediate corporate tax, provided certain ownership and control conditions are met under Canadian tax law.
Singapore The parent subsidiary company relationship is defined by Part 1, Section 5, Subsection 1 of the Companies Act, which states: 5.—(1) For the purposes of this Act, a corporation shall, subject to subsection (3), be deemed to be a subsidiary of another corporation, if — :(a) that other corporation — ::(i) controls the composition of the board of directors of the first-mentioned corporation; or :::[Act 36 of 2014 wef 01/07/2015] ::(ii) controls more than half of the voting power of the first-mentioned corporation; or ::(iii) [Deleted by Act 36 of 2014 wef 01/07/2015] :(b) the first-mentioned corporation is a subsidiary of any corporation which is that other corporation's subsidiary
United Kingdom In the United Kingdom, is generally held that an organisation holding a 'controlling stake' in a company (a holding of over 51% of the stock) is in effect the de facto parent company of the firm, having overriding material influence over the held company's operations, even if no formal full takeover has been enacted. Once a full takeover or purchase is enacted, the held company is seen to have ceased to operate as an independent entity but to have become a tending subsidiary of the purchasing company, which, in turn, becomes the parent company of the subsidiary. (A holding below 50% could be sufficient to give a parent company material influence if they are the largest individual shareholder or if they are placed in control of the running of the operation by non-operational shareholders.) It defines a holding company as a company that holds a majority of the voting rights in another company,
or is a member of another company and has the right to appoint or remove a majority of its board of directors,
or is a member of another company and controls alone, pursuant to an agreement with other members, a majority of the voting rights in that company.
United States Banking After the
2008 financial crisis, many U.S. investment banks converted to holding companies. According to the
Federal Financial Institutions Examination Council's website,
JPMorgan Chase,
Bank of America,
Citigroup,
Wells Fargo, and
Goldman Sachs were the five largest bank holding companies in the finance sector, , based on total assets.
Utilities The
Public Utility Holding Company Act of 1935 caused many energy companies to divest their subsidiary businesses. Between 1938 and 1958 the number of holding companies declined from 216 to 18.
An energy law passed in 2005 removed the 1935 requirements, and has led to mergers and holding company formation among power marketing and power brokering companies.
Broadcasting In American
broadcasting, many major
media conglomerates have purchased smaller broadcasters outright, but have not changed the
broadcast licenses to reflect this, resulting in stations that are (for example) still licensed to
Jacor and
Citicasters, effectively making them such as subsidiary companies of their owner
iHeartMedia. This is sometimes done on a per-
market basis. For example, in
Atlanta both
WNNX and later
WWWQ are licensed to "WNNX LiCo, Inc." (LiCo meaning "license company"), both owned by
Susquehanna Radio (which was later sold to
Cumulus Media). In determining
caps to prevent excessive
concentration of media ownership, all of these are
attributed to the parent company, as are
leased stations, as a matter of
broadcast regulation.
Personal holding company In the United States, a personal holding company is defined in section 542 of the
Internal Revenue Code. A corporation is a personal holding company if both of the following requirements are met: • Gross income test: at least 60% of the corporation's adjusted ordinary gross income is from dividends, interest, rent, and royalties. • Stock ownership test: more than 50% in value of the corporation's outstanding stock is owned by five or fewer individuals. ==Parent company==