TLDR:
A subsidiary is a company controlled or owned by another company (the parent or holding company), either wholly or partially, maintaining its own legal identity and operations.
Wholly Owned vs. Partially Owned Subsidiaries
The degree of parent ownership in a subsidiary has significant implications for consolidation, governance, and liability. Wholly owned subsidiaries (100% owned) are fully consolidated in the parent’s financial statements and the parent bears all risk and reward. Partially owned subsidiaries where the parent controls more than 50% are consolidated but minority interests are shown separately. Minority-owned investments (under 50%) may be accounted for using the equity method or cost method depending on the level of influence. Each structure has different implications for tax, accounting, and risk allocation.