A wholly owned subsidiary is a company that is completely owned by another company called the parent company or holding company. The parent company will hold all of the subsidiary's common stock. Since the parent company owns all of the subsidiary's stock, it has the right to appoint the subsidiary's board of directors, which controls the subsidiary. Wholly owned subsidiaries may be part of the same industry as the parent company or a part of an entirely different industry. Sometimes companies will spin-off part of itself as a wholly owned subsidiary such as a computer company spinning of its printer manufacturing division.
Advantages