A subsidiary company, subsidiary, or daughter company[1]is a company that is completely or partly owned and partly or wholly controlled by another company that owns more than half of the subsidiary's stock.[2][3]The subsidiary can be a company, corporation, or limited liability company. In some cases it is a government or state-owned enterprise. The controlling entity is called its parent company, parent, or holding company.[4]

An operating subsidiary is a business term constantly used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity, locomotives and rolling stock. In contrast, a non-operating subsidiary would exist on paper only (i.e. stocks, bonds, articles of incorporation) and would use the identity and rolling stock of the parent company.

Subsidiaries are a common feature of business life, and all multinational corporationsorganize their operations in this way.[5]Examples include holding companies such as Berkshire Hathaway,[6]Time Warner, or Citigroup; as well as more focused companies such as IBM, or Xerox Corporation. These, and others, organize their businesses into national and functional subsidiaries, oftentimes with multiple levels of subsidiaries.