Monday, March 29, 2010

Holding and Subsidiary company

Holding Company: A company acts like a parent company of the other company.
Subsidiary Company: A company which is registered under the holding company name.

For Example:
-MASB (Known as MAS Airline, Malaysia Airline System Berhad), the Holding Company.
-FlyFirefly Sdn Berhad( Known as Firefly Airline) the subsidiary company of MASB.


Same goes here, Firefly Sdn Bhd is counted to be a legal person separately from MASB. Yet, MASB has the power to control over Firefly Sdn Bhd. They just act like a totally different entity, but they have relationship to each other.

Therefore:
-the company's liability is limited.
-they can sue or maybe sued by others.
-they must be incorporated by two or more person.
-they may own land.
-Their members may come and go without changing the company's personality.
-they are separately different legal entities.
-A company will not end when its members leave and continue to exist until it is dissolved through certain legal processes.

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