The organizational and legal form of an enterprise in Russia leaves a significant imprint on its activities: for example, the procedure for taxation, reporting and other parameters depends on it. In this case, a commercial company has the right to form a subsidiary, which also has its own characteristics.
The entire range of options for organizational and legal forms permissible for existence in the Russian Federation is recorded in the Civil Code of the Russian Federation, which is registered in the code of laws of our country under number 51-FZ of November 30, 1994.
Subsidiary concept
The concept of a subsidiary is described in Article 105 of this regulatory legal act. In particular, paragraph 1 of this article determines that one enterprise can be recognized as a subsidiary of another if there are a number of conditions in such a situation.
So, the first option for the basis for recognizing one company as a subsidiary in relation to another is the size of the share of the authorized capital owned by the parent company. If the specified size is predominant, that is, it gives the parent company a casting vote in the event of a vote, then the other company is a subsidiary of it. In practice, the voting share is usually more than 50% of the share capital.
Another reason for one company to be considered a subsidiary of another is the existence of a written agreement between them, drawn up in accordance with all the requirements of modern Russian office work, on the existence of a corresponding relationship between organizations. In this case, the criterion will also be whether the parent company has a casting vote. In addition, article 105 of the Civil Code of the Russian Federation admits the existence of other reasons ensuring the parent company has the right to a casting vote, on the basis of which another company can be recognized as a subsidiary of it.
Subsidiary rights and obligations
The position of a subsidiary makes it somewhat dependent on the parent company. So, for example, it is obliged to follow the instructions of the latter in relation to decisions related to its economic activities. At the same time, the management of the main enterprise should remember that the responsibility arising as a result of such decisions will be distributed between two companies, which in the event of losses in such a situation will be jointly and severally liable.
At the same time, the subsidiary company also has a number of important rights in relation to the parent company. So, for example, it is not responsible for any debts of the latter, however, the parent company, in turn, is liable of a subsidiary nature for the debts of the “daughter” in case of her bankruptcy. True, the condition of subsidiary liability in this case applies only when the bankruptcy has occurred through the fault of the parent company.
