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What is Parent Co. Father Co. Mother Co. Sister Co. Brother Company?
Parent Company / Parent Corporation
Meaning & Definition of Parent Company / Parent Corporation
A company can be called as the Parent company of another company, if that company, -
- holds(owns) more than 50% shareholding or voting stock of another company; or
- controls the Board (Board of Directors) of another company either by electing directors or by way of its influence.
(1) A Ltd. owns 53% shareholding in B Ltd.
(2) A Ltd. elects all Directors in B Ltd.
In the above cases, A Ltd. would be considered as the Parent company of B Ltd.
(1) Parent companies are generally referred to as Holding company.
Meaning & Definition of Mother Company
A Mother company has similar meaning like a Parent company.
mother company owns a number of other companies, which may be in the
similar line of business or totally other stream of business.
Sister Company / Sister Concern Company
Meaning & Definition of Sister Company / Concern Company
When more than one
company are under the management of a single company (a Parent company);
they will be called as sister companies to each other.
C Ltd. is a Parent company of A Ltd. & C Ltd. is also a Parent company of B Ltd.
Therefore, A Ltd. & B Ltd. are sister companies of C Ltd.
(1) Sister companies are generally known as the subsidiary companies of the Parent company.
Generally, sister companies, by its term, do not have any legal
recognition/significance. But as a subsidiary company, these companies
comply with any rules and regulations prescribed for them.
Meaning & Definition of Father Company
A Father company too has similar meaning like a Parent company.
A father company is generally a company which owns one or more companies.
Meaning & Definition of Brother Company
Brother Company is not a famous term; hence it is very rare that two or more companies are referred as brother companies.
When two or more companies are run under the same group company, it could be called as brother companies.