IF
your existing company is registered outside the US and is going to
start business in the US (establish a subsidiary, representative
office), this is the right place for you to look.
Documents
Required from the country of company jurisdiction:
-
Certificate / Letter of Good standing. Normally obtained from the
Registrar of Companies where your company was registered. In case
your country's Registrar of companies does not issue such
documents, the letter of good standing
would
need to be obtained from your country's tax authority.
All
documents have to have a notarized translation annexed, if not in
English.
Economy
Package:
Name availability check, State fees, PREPARATION AND FILING OF
ARTICLES OF INCORPORATION/ORGANIZATION, Service fees.
complete
plus Package
*Shipping UPS to be quoted separately, depends on the country
of destination.
A subsidiary, in business, is an
entity which is controlled by another entity. The controlled entity is
called a company, Corporation,
or Limited
Liability Company, and the controlling entity is called its parent
(or the parent company). The reason for this distinction is that an
individual cannot be a subsidiary of any organization, only an entity
representing a legal fiction as a separate entity can be a subsidiary.
This is because individuals have the capacity to act on their own
initiative; a business entity can only act through its directors,
officers and employees.
The most common way that control of a subsidiary is achieved is
through the ownership of shares
in the subsidiary by the parent. These shares give the parent the
necessary votes to determine the composition of the board of the
subsidiary and so exercise control. This gives rise to the common
presumption that 50% plus one share is enough to create a subsidiary.
There are, however, other ways that control can come about and the
exact rules both as to what control is needed and how it is achieved
can be complex (see below). A subsidiary may itself have subsidiaries,
and these, in turn, may have subsidiaries of their own. A parent and
all its subsidiaries together are called a group, although this term
can also apply to cooperating companies and their subsidiaries with
varying degrees of shared ownership. When ownership is not shared, so
that a subsidiary is wholly owned, it is called a branch. A subsidiary
is different from a branch in that the former is jointly owned by the
parent company and others while the latter is completely owned by the
parent company
Subsidiaries are separate, distinct legal entities for the purposes
of taxation and regulation. For this reason, they differ from
divisions, which are businesses fully integrated within the main
company, and not legally or otherwise distinct from it.
Subsidiaries are a common feature of business life and few if any
major businesses do not organize their operations in this way.
Reasons why a company may have
subsidiaries
The following are common reasons why companies have subsidiaries,
but no list can ever be exhaustive.
Risk: Many businesses use subsidiaries to manage risk.
This is achieved usually by setting up a subsidiary corporation to
undertake the higher risk venture. If that venture subsequently
become subject to litigation or liability, legally the subsidiary
corporation would be liable and not the parent (unless the parent
made guarantees, in which case the parent is liable for the
guarantees it made).
Acquisition: When one company acquires another, the one
acquired becomes a subsidiary of the acquiring company.
Regulation: Law may require a company to conduct certain
activities through a distinct entity. Examples include banking or
the operation of utilities such as electricity or
telecommunications. As subsidiaries are distinct legal entities,
this ensures full disclosure of the financial results of these
businesses and insulates them from the other activities of their
group.
Territoriality: A group, particularly a multinational
one, may create subsidiaries in many jurisdictions simply to
prevent someone else doing so to the confusion of their customers.
Taxation: Taxation is still largely conducted on national
lines. Multinational businesses may therefore establish
subsidiaries in each jurisdiction to bring together all their
activities in that jurisdiction.
Control
The word "control" used in the definition of
"subsidiary" is generally taken to include both practical
and theoretical control. Thus, reference to a body which
"controls the composition" of another body's board is a
reference to control in principle, while reference to being are able
to cast more than half of the votes at a general meeting, whether
legally enforceable or not, refers to theoretical power. The fact that
a company has a holding of less than 51% which, because the holdings
of others are widely dispersed, gives effective control is not enough
to give that company 'control' for the purpose of determining whether
it is a subsidiary.
