A subsidiary is an entity (e.g., a corporation) in which another entity (known as the parent or holding company) has a controlling share. Although the subsidiary operates as a separate legal entity, the parent company can influence its policies, management, and operations. Subsidiaries are often established to manage specific business operations, enter new markets, or mitigate risks associated with different lines of business.
[Last updated in June of 2024 by the Wex Definitions Team]