Large corporations open new organizations to expand their business. They are called "children." The company creates such companies at its own expense. It is responsible for their work to the state, regulatory authorities. Accordingly, the management of subsidiaries is carried out from the parent organization. However, such companies are not responsible for the operation of the main corporation. Let us further consider what a subsidiary of LLC is. 
General information
A subsidiary is a legal entity. It must be registered in the manner prescribed by legislative acts. The formation of a new company is carried out by transferring part of the property to economic management. Acting as the founder, the main corporation approves the head of the organization, realizes the rights of the owner, which is established by the relevant regulatory acts.
Specificity
A subsidiary company is an organization whose structure is identical to that established in the main office. The difference between the two is that the main corporation has more rights and advantages. However, she has more responsibility. One of the advantages of the main office is the ability to make administrative decisions regarding all the activities of an open company. It is generally accepted that for full participation in its activities it is necessary to have 3% of its shares. However, in practice, this indicator rises to 5%. Of course, a controlling stake (more than 50%) gives many advantages to the main corporation. At its core, a subsidiary is a separate division. Activities are controlled not only by the main corporation, but also by the state. All financial transactions are under the scrutiny of supervisors.
Guide
The main organization directs its employees to newly opened firms. The head of the representative office at the same time gets a place on the board of directors. According to this principle, for example, Gazprom subsidiaries work. The employees of the main office can give orders, recommendations on promoting the business and on the entire activity of the organization as a whole. However, the right to make a final decision belongs to the head of the subsidiary.
Indemnification
In some cases, the created company due to illiterate policies of the main corporation begins to lose profits. In such situations, lenders are entitled to demand that the parent company pay off the arrears. Similarly, counterparties act in the event of bankruptcy of an open organization. 
Opportunities
A subsidiary is primarily a tool for expanding a business. Due to the network of such organizations, the main corporation can significantly strengthen its market position. A large holding has undoubtedly more weight than a single firm. An example of this is the subsidiaries of Gazprom. The identification of potential competitors in the market is one of the key tasks of such organizations. Often, single firms quickly leave the sector when a representative office of a large holding company appears in it. In addition, a subsidiary may be formed to capture new market segments. To increase the inflow of capital, the corporation should look for new, more promising sites. This leads to the active entry of large corporations into international markets through the opening of representative offices abroad. 
Benefits
Large corporations may experience various problems during their work. To address some of these, an enterprise may set up a subsidiary. Often, corporations need to improve the administration system and free themselves from routine activities. The implementation of this task may well be facilitated by the formation of a new organization. At the expense of the subsidiary, important issues such as recruitment and the fight against competitors are also resolved. The more such organizations a holding has, the more advantages it has in the market. 
Subsidiary and Parent Company
It is considered normal that the organization formed by the main corporation becomes an independent company with separate property and equity. Accordingly, it is not liable for the debts of the parent company, nor can the main holding be held liable for the obligations of the subsidiary. Meanwhile, the legislation nevertheless provides for a number of cases in which the requirements may apply to the main corporation. The parent company is responsible when:
- conclusion of the transaction was carried out by her order (this fact should be documented);
- the subsidiary complies with the instructions of the parent organization and is declared insolvent (bankrupt).
In the first case, the settlement of obligations is carried out in full. In the second situation, the parent company repays only that part of the debt that the subsidiary is not able to pay.
Unlike branch
First of all, the subsidiary has legal autonomy. The branch is fully connected to the main office. This fact determines other differences. Moreover, it often happens that the main corporation opens a subsidiary in one region and a branch in another. Both organizations will have a common goal. In this regard, in practice, very much of the work of branches and subsidiaries does not differ much. The discrepancy between these organizations can exist only on legal grounds. 
Creation Features
Before opening a subsidiary, it is necessary to develop a Regulation on its activities. Based on this document, the new organization will work. In addition, changes should be made to the charter of the main corporation. Applications must be sent to the registration authority in the prescribed forms. The formation of a subsidiary should be discussed at a general meeting. This issue should be recorded in the minutes. The decision package on the creation of a new organization must be attached to the package of documents.
During the discussion, the head of the future company is also determined. The prepared package of documents is certified by a notary and sent to the registration authority. A subsidiary company will be deemed created from the moment of making the corresponding entry in the Unified Register. After that, organizational issues are resolved. The subsidiary must have the entire set of documents established for legal entities. The organization also needs to register with the tax office.
