Define: Wholly Owned Subsidiary

Business, Legal & Accounting Glossary

Definition: Wholly Owned Subsidiary



What is the dictionary definition of Wholly Owned Subsidiary?

Dictionary Definition


A Wholly Owned Subsidiary is a subsidiary undertaking that is fully (100%) owned by a holding company.

In a wholly owned subsidiary there is no minority interest.


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Full Definition of Wholly Owned Subsidiary


A wholly-owned subsidiary is a company whose stock is entirely owned by another company. The owner of a wholly-owned subsidiary is known as the parent company or holding company. Because the parent company owns all of the stock of the wholly-owned subsidiary, the parent company can control all of its activities. Moreover, under GAAP, all of the financial transactions of a wholly-owned subsidiary are consolidated with those of the parent company. Thus, all of the activities of the wholly-owned subsidiary are part and parcel of the parent company for both operating and reporting purposes. Why, then, does a company establish a wholly-owned subsidiary? A wholly-owned subsidiary is a separate entity for legal purposes. Thus the laws of the state or country in which the wholly-owned subsidiary is incorporated apply to the subsidiary, but not the parent company.


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Wholly Owned Subsidiary. PayrollHeaven.com. Retrieved April 05, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/wholly-owned-subsidiary/

Definition Sources


Definitions for Wholly Owned Subsidiary are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 5th February, 2020