A Subsidiary vs. Division

Difference Between Subsidiary and Division The main difference between a subsidiary and a division is simple; a division…

Difference Between Subsidiary and Division

The main difference between a subsidiary and a division is simple; a division is a part of a company that conducts business under a factious name, and a subsidiary company is one that is owned by the main company. A division is the same as a limited liability company or a corporation.  A division company is not separate from the primary company; it is in fact a part of the primary business.  If any problem occurs in the financial part of a division, the subsidiary takes the fall. This will always be the case, as long as the division company is a part of the subsidiary company.

A company that does not have any branches cannot be a part of a subsidiary of any organization, because it has no entity. The truth of the matter is a parent company can be larger or smaller than a subsidiary. It can also be part of another state or country; it does not have to be in the same town, nor does it have to operate along the same lines. It can be a completely different business altogether. Size and location does not matter when it comes to whether or not a business is a subsidiary or not.

It is safe to say that a division should be conducting the same type of business as the parent company, since it is part of the division. Even though, most businesses have a very different name. This is typical for most businesses they have a parent company in one state and a division company in another state however, that do not change the structure of that business. One other fact to note is that each business does not have to have the same name nor do they have to conduct the same type of business.

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