Create a subsidiary to develop your business

Published on : 22 October 20213 min reading time
There are many strategies that can be used to make your business flourish, and one of them is to create a subsidiary. What is a subsidiary? It is a company, resulting from an entrepreneurial expansion project, which is subject to the control of the parent company. It can be located in the same country as the parent company or it can be established abroad. But in which cases can a subsidiary ensure the development of a company and how is it created?

How to create a subsidiary?

The creation of a subsidiary is based on precise administrative steps. First of all, the competent entity to make a decision differs according to the corporate purpose of the subsidiary. If it is the same as that of the parent company, then the management of the company is competent. Otherwise, the partners must hold an extraordinary meeting. Once the form and the corporate purpose have been chosen, all that remains to be done is to draw up the statutes, to discuss the contributions in cash and in kind by the partners, and to file an application for creation and registration with the CFE. 

How does a subsidiary work?

A subsidiary, even if it is legally independent, is controlled by the parent company. In fact, it is the latter that makes the decisions for the realization of its business plan. On the other hand, the subsidiary has a certain independence in its operation and the management of its local affairs. It also has its own personal assets and its own human resources.

A subsidiary to develop your business?

When a company becomes increasingly successful, it quickly expands its areas of activity and starts to run out of space. Therefore, establishing a subsidiary can only be beneficial. Not only will it allow the company to limit its areas of interest by entrusting, for example, the production and sale of a particular product to the subsidiary, but the latter will also have the opportunity to have a specialty from the very beginning. But still, a subsidiary is the best initiative to set up in a foreign country. Of course, it is necessary to undertake a market study to ensure that the products will be better received by customers and that the tax system will not have a negative impact on the company’s life.