The main difference between a subsidiary and an associate company is the:
A)number of investors.
B)level of control the parent company has.
C)annual turnover.
D)size of the company.

Question

Quizplus · Accepted Answer

The main difference between a subsidiary and an associate company is the level of control the parent company has. In a subsidiary company, the parent company has a controlling interest of more than 50% and can exercise significant control over the operations and decision-making of the subsidiary. In contrast, an associate company is a company in which the parent company has significant influence but not a controlling interest. This means that the parent company can have a shareholding of between 20% and 50% and can influence the strategic decisions of the associate company but cannot control its operations. Therefore, the level of control is the key difference between a subsidiary and an associate company.

The Main Difference Between a Subsidiary and an Associate Company