Wholly Owned Subsidiary

Business, Legal & Accounting Glossary

Definition: Wholly Owned Subsidiary

Quick Summary of Wholly Owned Subsidiary

A subsidiary whose parent company owns virtually 100% of its common stock.

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.

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.

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Wholly Owned Subsidiary. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 28, 2021 https://payrollheaven.com/define/wholly-owned-subsidiary/.
Chicago Manual of Style (CMS):
Wholly Owned Subsidiary. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/wholly-owned-subsidiary/ (accessed: September 28, 2021).
American Psychological Association (APA):
Wholly Owned Subsidiary. PayrollHeaven.com. Retrieved September 28, 2021, 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: 26th April, 2020 | 8 Views.