What is a subsidiary company?

A subsidiary company is owned by a parent company that holds a controlling stake in it. It is defined in section 1159 of the Companies Act 2006: “A company is a ‘subsidiary’ of another company, it’s ‘holding company’ if that other company: (a) holds a majority of the voting rights in it, or (b) is a member of it and has the right to appoint or remove a majority of its board of directors, or (c) is a member of it and controls alone, pursuant to an agreement with other members, a majority of the voting rights in it…or if it is a subsidiary of a company that is itself a subsidiary of that other company.”