Parent Company
"Can a parent company be held liable for a subsidiary's debts?"
Quick Answer
A company that exerts direct or indirect control over another entity (the subsidiary), usually by holding the majority of voting rights or the right to appoint the board.
Scope and Legal Distinctions
A parent and subsidiary ordinarily remain separate legal persons. Ownership alone does not make the parent the debtor under every subsidiary contract.
What to Check in Practice
Review guarantees, direct undertakings, group-control conduct and the contracting entity; preserve the actual ownership and decision-making records.
Sources & Authorities
Statutory framework and official guidance for this definition.
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