What are centralized forms of entrepreneurship? The process of transition to them includes the application of mechanisms of control and influence between organizations, as well as their development. For the USA and countries of Western Europe, this stage is considered passed. As for the Russian Federation, here it is still far from complete.
General information
The above is explained by the weakness of the domestic regulatory framework. It also regulates the relationship of dependence. However, in this situation there is a plus. It is about the possibility of using someone else's experience, which is time-tested. Nevertheless, the legislator is far from always doing this. In this case, it is advisable to study theoretical issues that are related to interdependence relations between commercial organizations. This will significantly reduce the list of problems that arise in practice.
Background information
What does the concept of subsidiaries and affiliates include? Please refer to the relevant law. According to him, a company is considered a subsidiary in the event that another business organization has the ability to determine the decisions that it takes. This may be effected by virtue of a concluded contract, participation (prevailing) in the authorized capital or by other means. Everything in the same article indicates a concept defining the term "dependent society". It is recognized as such if the dominant organization concentrates more than 20% of the corresponding shares of the first.
Management of subsidiaries and affiliates
Here, the presence of an element of indirect economic and legal control is noted. This can be seen both in the relations of the dominant-dependent and the main subsidiary. The presence of control indicates the existence of a relationship of subordination and power. This also applies to subordination. Thus, subsidiaries and affiliates are related to each other. The main ones, to one degree or another, can lead the controlled ones. That is, they influence the decisions that are made by the subsidiary. In particular, this applies to those adopted by the board of directors or the general meeting of shareholders.
Subsidiaries and dependent societies. Features of functioning
They are not deprived of the status of a legal entity due to the presence of an element of subordination. That is, we are talking about an independent subject of civil law relations. In accordance with this circumstance, subsidiaries and affiliates are fundamentally different from representative offices and branches. The latter are considered only as units of the organizations that created them. In this case, there are a number of other nuances. For example, subsidiaries and affiliates can be created in any place. This also applies to the location of the main organization. For representative offices and branches, this is excluded.
The nuances of creating
This legal form is not named in the legislation. In this regard, we can conclude that subsidiaries and dependent companies can be created in any form permitted by the legislation of the Russian Federation. We are talking about the following companies:
- With additional responsibility.
- Joint stock company.
- With limited liability.
The main differences
Subsidiaries and dependent business entities are distinguished by one common feature. This is a legal relationship. However, there are certain differences between them. The basis of a subsidiary is a criterion for the ability of the dominant structure to determine its decisions. At the same time, the dependent is determined by the formal condition for the prevailing organization to participate in its authorized capital.
Target focus
Subsidiaries and affiliates have different tasks. The whole point is the establishment of such a relationship. In the case of the main subsidiary, these are the features of the responsibility of the former for transactions of the latter. This also includes the onset of insolvency of the latter. The predominantly dependent relationship is primarily important for antitrust law.
Registered capital
When using this criterion, there are certain difficulties. It is about how to define the term "prevailing." As for the absence of a formal amount of participation in the authorized capital, this makes it possible to recognize the organization as the main one, even if it has a package of less than 20% of the voting shares of the subsidiary. Prevailing participation also has a number of certain nuances. It does not mean at all that the main society will influence absolutely all decisions of the subsidiary.
Financial and industrial groups, concerns and holdings
The system of societies connected with control and economic dependence is formed by the main one together with subsidiaries. It can be called a financial-industrial group (RF), a holding company (England, USA) and a concern (Germany). The content of these formations is identical. Thus, for further convenience, one general term will be used - "holding". Its creation is objective in terms of business practice.
So, the enterprise has become quite large. Money turnover is increasing, extensive investment projects are being implemented. It becomes necessary to create divisions of the company, as well as subsidiaries. A certain hierarchy is needed. Minimization of tax and other mandatory payments is also required. Such a situation for business development is quite natural. Accordingly, we can say that the holding arises independently. What, in essence, are the largest Western companies at present? These are whole systems consisting of main and subsidiary communities that are interconnected. We are talking about groups of people who are united under one brand name.
According to the statistics of the Mond Diplomatic, in the 90s. About 37 thousand transnational organizations functioned. They, in turn, had approximately 170 thousand branches and subsidiaries. In Russia, one can note several of the largest companies that have
vertical integration. So, there are subsidiaries and affiliates of Russian Railways, RAO Gazprom, Yukos, and LUKOIL. Currently, a number of domestic enterprises related to medium and small businesses are characterized by a similar organization of corporate activities in one form or another. Using the structure of the holding system, many important tasks can be solved, among them:
- organization of a coordinated sales and production policy;
- effective management of subordinate enterprises.
At the same time, there is no special legal regulation. Moreover, in Western countries it is available. Thus, the potential of this structure is not fully realized.