ABSTRACT
A subsidiary company is a company which is either owned and controlled by one company, in which case it is a ‘wholly owned subsidiary’ or where it is owned by more than one company with one company owning a controlling interest in it, it is simply a ‘subsidiary’. The associated company may have similar restrictions in its Articles of Association as a subsidiary. Hence, the shareholders will have the ability to discuss matters which are important to them before the final decision is made by the Board of Directors of the subsidiary or associate. In most cases investments are held simply for the income they generate or the possibility of an increase in value, whereas the investment in subsidiaries and associates should mean that the company’s overall operations are more efficient and/or more profitable. Good corporate governance is as important in subsidiaries, associates and investments as it is to the investor.
