Parent company or Parenting helps subsidiaries make wise choices in their own acquisitions, divestitures, and new ventures. A parent company is a single corporation that owns a majority stake in another corporation or corporations. Parent corporations are formed when subsidiaries are spun off or carved out, or through a purchase or merger.
Parent firms must properly account for their subsidiaries on their financial statements and in tax returns. Parent corporations can be conglomerates composed of a variety of seemingly unrelated enterprises, such as General Electric (GE), whose numerous business segments might benefit from cross-branding. A parent company, on the other hand, is not the same as a holding company.
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