Why a small family firm can own the company behind James Bond
In corporate family trees, the parent need not be the giant. DanJaq, a closely held family company, controls Eon Productions, the much larger business that runs the James Bond films. What makes one company the parent is not size or headcount but control, usually through owning enough shares to pick the board.
A subsidiary is a company owned or controlled, fully or partly, by another. Unlike a branch or division, it is its own legal person: it follows the laws of the place where it is incorporated, keeps its own executives, can sue and be sued, and pays taxes separately. Its debts normally stay its own, although creditors can sometimes reach the parent if a court agrees to pierce the corporate veil.
Control usually comes from holding a majority of the shares, which lets the parent elect the directors. That is why people often assume 50 percent plus one share is the magic line. The real rules are messier. European law also counts the right to appoint most of the board, contracts that grant dominant influence, or voting agreements with other shareholders, and in some cases a parent controls a company in which it holds few or no shares.
Large groups stack these relationships in tiers, like generations of a family. Take Ford Component Sales, a small British business supplying parts to specialist carmakers such as Morgan and Caterham. Above it sits a chain: Ford Motor Company in Dearborn, then a holding company registered in Delaware, then a British holding company with just five employees, and then Ford's main UK operation in Brentwood, with 10,500 staff. A first-tier subsidiary is a child of the ultimate parent; the next tier down is a grandchild.
Separation cuts both ways. Parent and subsidiary can work in different countries and industries, and after a takeover they may even compete. One can face bankruptcy or a criminal investigation while the other carries on untouched. And a subsidiary can have only one parent; when two owners share control by unanimous agreement, the arrangement counts as a joint venture instead.
Source: Subsidiary
