Parent company

A parent company is a corporation that owns a controlling interest in one or more subsidiaries. It is usually a larger and more established firm that has acquired or established associate entities to expand its operations and diversify its business.

Parent companies typically have ownership of at least 51 percent and control over their associated companies, but these entities operate as separate legal entities. This means that the affiliates may maintain their own financial statements, boards of directors, and management teams, and are responsible for their own operations and decisions.

The parent company may provide strategic direction and financial support to the associated firms. In some cases, the parent company may also be involved in the day-to-day operations and decision-making of its subsidiaries. The level of involvement varies depending on the ownership and control structure of the parent company and its affiliated entities.