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Contract & Commercial Law vocabulary · Companies & Partnerships

Subsidiary

Meaning in contract & commercial law, with examples

/səbˈsɪdiəri/nounCore term

In contract & commercial law, subsidiary means: A company that is controlled by another company, usually because the other company owns more than half of its shares.

In Turkish: bağlı şirket, yavru şirket

How it is used

Contracts often extend rights and duties to a party's 'subsidiaries and affiliates'. A 'wholly-owned subsidiary' is 100% owned by its parent company. Groups use subsidiaries to separate risks and to operate in different countries.

Example sentences

  1. The contract was signed by our Turkish subsidiary, not by the parent company.

  2. The license covers the customer and its wholly-owned subsidiaries.

Common collocations

  • wholly-owned subsidiary
  • parent company
  • subsidiaries and affiliates
  • set up a subsidiary
  • companyA business organisation registered as a separate legal person, so it can own property, sign contracts and sue or be sued in its own name.
  • shareholderA person or company that owns shares in a company and therefore owns part of it, usually with rights to vote and to receive dividends.
  • joint ventureA business arrangement in which two or more independent parties combine resources for a specific project or business while remaining separate companies.
  • acquisitionThe purchase of a company, part of a company or a business, usually by buying its shares or its assets.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Companies & Partnerships

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This page explains English vocabulary for learners. It is not legal advice.