Is it better to open a branch or subsidiary?

Cabbage radish has its own love. The following are the specific differences between a branch and a subsidiary for reference.

Difference Between Branch and Subsidiaries.

Branches and subsidiaries have different legal status due to their different capital contributions, so it is very important to identify them clearly to sue the lawsuit, otherwise the subject of the lawsuit will be wrong, and the lawsuit will be lost in the procedure. In order to correctly identify, please grasp the following points:

First, the characteristics of the branch:

According to Article 39 of the Regulations of the People's Republic of China on the Administration of Registration, "a branch refers to an institution established by a company outside its domicile to engage in business activities. A branch office does not have legal personality". According to this provision, the branch has the following characteristics:

1. It is a branch of the company;

2. Have business qualifications;

3. It does not have the status of a legal person.

Second, the characteristics of the subsidiary:

A subsidiary is a company in which a certain amount of shares are held by another company and controlled by another company. The parent company is the one that holds shares in other companies and can control them. The parent company and the subsidiary are in an economic relationship controlled by shares, and the subsidiary has legal personality. The characteristics of the subsidiary are:

1. A certain amount of shares of a subsidiary is held and controlled by a company.

2. The subsidiary has an independent legal personality.

3. Recognize the similarities and differences between branches and subsidiaries to facilitate identification.

Similarities: all have business qualifications and have their own office space;

Differences: (1) The branch does not have the legal personality of an enterprise and cannot independently bear the civil liability to the outside world, and its civil liability is borne by the company that established the branch. The subsidiary has the status of an independent corporate legal person and can independently bear civil liability in accordance with the law, and the parent company is not liable for the debts of the subsidiary.

2) The name of the business is different. The branch is to put the name of the branch in front, followed by the name of a certain place plus the branch; Subsidiaries can come up with their own names and do not need to add the name of the parent company. (3) The content of the enterprise industrial and commercial registration of the Administration for Industry and Commerce is different, which is embodied in the capital contribution.

The legal basis for this is Article 13 of the Company Law of the People's Republic of China: "A company may establish a branch, but the branch does not have the status of a corporate legal person, and its civil liability shall be borne by the company." The company may establish a subsidiary, which has the status of a corporate legal person and independently bears civil liability in accordance with the law".

Is it better to set up a branch or a subsidiary? Whether to set up a branch or a subsidiary, it is necessary to comprehensively consider which type of company is more suitable for the business development of the enterprise, more in line with the strategic management of the enterprise, and more conducive to the sustainable operation of the enterprise.

Subsidiaries and branches have their own advantages and disadvantages, depending on the purpose and actual needs of the parties to set up the company. The subsidiary has the status of a legal person and can independently bear civil liability in accordance with the law; However, a branch office does not have the status of a legal person, and its civil liability for losses and coarse losses shall be borne by the company, and the specific type of company to be established shall be determined by the parties themselves.

Company Law of the People's Republic of China

Article 14. A company can set up a distribution town company. To establish a branch, it is necessary to apply for registration with the company registration authority and obtain a business license. A branch office does not have legal personality, and its civil liability is borne by the company.

A company may establish a subsidiary, which has the status of a legal person and independently bears civil liability in accordance with the law.

Civil Code of the People's Republic of China

Article 74.

A legal person may establish a branch office in accordance with the law. Where laws and administrative regulations provide that branch offices shall be registered, follow those provisions.

If a branch engages in civil activities in its own name, the civil liability arising therefrom shall be borne by the legal person;

It is also possible to bear the property of the branch management Hu Bu first, and if it is not enough, it shall be borne by the legal person.

1. Branches and subsidiaries

1. A branch is a branch or subsidiary directly engaged in business activities under the head office. It is not a company in the true sense of the word, does not have the legal personality of an enterprise, does not have an independent legal status, and does not independently bear civil liability.

2. Subsidiaries are different: subsidiaries have legal personality and can independently bear civil liability. A parent company's control of a subsidiary is usually an equity-based possession or control agreement. The parent company has de facto decision-making power over the subsidiary, in particular the composition of the subsidiary's board of directors.

In addition to the method of share control, the relationship between a parent company and a subsidiary can also be formed by entering into certain special contracts or agreements between relatives and making a company under the control of another company. Many companies often choose to set up subsidiaries or branch offices to expand themselves, so what are the benefits of these two ways? Below I will explain it for you.

1) The benefits of setting up a subsidiary are as follows:

1. The subsidiary is an independent legal person and only bears limited debt liability;

2. The subsidiary's reporting of enterprise results to the parent company is limited to production and business activities;

3. The subsidiary is an independent legal person, and its income tax calculation and collection are carried out independently. The subsidiary can enjoy tax incentives offered by the host country to its resident companies, including tax holidays;

4. When the tax rate of the host country is lower than that of the country of residence, the accumulated profits of the subsidiary can be deferred for tax payment;

5. Many countries provide for reduced or exempt withholding tax on dividends paid by subsidiaries to the parent company.

2) The advantages of setting up a branch office are as follows:

1. Branches are generally easy to operate, and the requirements of the financial accounting system are relatively simple;

2. The cost borne by the branch may be less than that of the subsidiary;

3. If the branch is not an independent legal person, the turnover tax shall be paid in the locality, and the profits shall be consolidated and taxed by the head office. In the early stage of operation, the branch often suffers losses, but its losses can offset the profits of the head office and reduce the tax burden;

4. The transfer of capital between the branch and the head office does not involve a change in ownership, so it does not have to bear taxes.

Which is more tax-efficient, a branch office or a subsidiary? Welcome to follow, like, the next wonderful content recommendation, please send a private message for business handling, the first step to start a business is to register a company and obtain a formal business license. The first step in applying for a business license is to obtain a registered address.

The address information on the company's business license, that is: the company's registered address; Industry and commerce requires that the company's registered address be consistent with the actual office space. So is it legal for the company's actual business address to be inconsistent with its registered address?

Let's talk about it Bosses who have just started a business may choose to start a company first. When registering a company, you need to have an address to register, in general, the company is registered at the address where its main office is located, different cities have different requirements for the registered address, and the specific requirements of the local industrial and commercial bureau shall prevail Bosses who have just started a business may want to use a residential address for registration because of a shortage of funds. However, the Company Law in 2012 clearly stipulates that no residential property can be used for commercial registration of a company, so if you want to use your own house or rent another person's house with a high dry mold for company registration, it is better to dispel this idea!

So is it okay to use both commercial and residential use? If you can't use a private house, you can always use it for both commercial and residential purposes, right? Not necessarily.

Whether commercial and residential housing can be used to register a company depends on the planned use on the real estate certificate. If the certificate is commercial or office, then this address can be used to register a company When commercial and residential can not be used to register a company, and you don't want to spend more money to rent an office building, choosing a virtual address is a good way, the virtual address has been filed with the industrial and commercial bureau, which can save you company costs, and it is also compliant and legal. Just note that the virtual address can only be used for registration, not the actual door-to-door office Can the registered address be different from the actual address?

For the registered address, some people will definitely ask, can my registered address and my actual business address be inconsistent? The answer, of course, is no. China's law clearly stipulates that there can only be one company address, and the registered address on the business license shall prevail If the regulations are violated, the administrative authority for industry and commerce may face the following penalties:

1. May bear a fine of between 10,000 yuan and 100,000 yuan 2. Warning, registration within a time limit, order to suspend business for rectification, withhold business license, and revoke business license and other administrative penalties if the circumstances are serious 3. If the enterprise is involved in litigation matters, the lawsuit filed against the enterprise legal person shall be under the jurisdiction of the court where the company is domiciled, and the court's documents will also be served to the address of the residence. For a small registered address, business owners must not lose a lot due to a small reason For a variety of factors, bosses must choose to change the registered address of industry and commerce.