How Do I Start a Subsidiary?

Question

My husband and I want to start a parent company that will have at least three subsidiary companies.

We want to register the parent company.

My question is do we need to register all the companies the same way.

If we have to register all the businesses the same way regardless of it being the parent company or a subsidiary, then how do you convey to the world the relationship between the Parent and subsidiaries.

And if we are only ready for one of subsidiary companies, can we just register that business and make the parent company later.

Answer 1

You can register any company 1st. And they don't have to be registered together. Let's say you and your husband register just 1 company, called P. Later on, you can register another co. called S. By letting S issue its shares to P, P becomes the parent co. and S the subsidiary. You can later incorporate another co., S2 and again let it issue its shares to P. P will become the parent of S2. S and S2 will then be fellow subsidiaries of P.

Let's take another scenario. You both incorporate a co. called S, with all the shares held by you both. Later, you incorporate another co. P and you want P to be the parent co. All you have to do is transfer all your shares in S to P. P then becomes the parent of S.

Whichever way you do it, the first co. you incorporate will be held by both of you as individuals and that lone co. will neither be a parent nor a subsid. It's just a single co. until you move on to the next step.

Answer 2

You can't have a sub without a parent. It wouldn't be a subsidiary if there was no parent.