What s a Parent Company?

Answer:
A company that owns another company is referred to

as a parent company. Parent companies sometimes own the businesses that they control outright. In other cases, the parent company owns a majority share of the organization’s voting stock, thereby possessing the controlling interest in the organization.

With 51 percent of the voting stock, a parent company is able to influence the election of the Board f Directors and exert control over the organization’s management and operations.

The business entities owned by parent companies are called subsidiaries. Parent companies are sometimes referred to as holding companies, and may control one or several subsidiary operations.