With entrepreneurs' efforts to operate the company, the size of the company may grow from a few people to hundreds or even thousands of people. At this time, it may be necessary to set up branches or subsidiaries. Many entrepreneurs must not understand these differences before setting up branches or subsidiaries. Next, the second brother of the enterprise will introduce this knowledge in detail:

The Company Law stipulates that a company may set up branches, which do not have the status of enterprise legal persons, and their civil liabilities shall be borne by the company. The Company may set up subsidiaries, which have the status of enterprise legal persons and independently bear civil liabilities according to law. The differences between subsidiaries and branches are as follows:

(1) A subsidiary is an independent legal person with its own name, articles of association and organizational structure. It carries out activities in its own name. Creditors' rights and debts incurred in the course of operation shall be borne by itself. The branch company does not have the qualification of enterprise legal person and has no independent name. Its name should be preceded by the name of the subordinate company, which is established by the subordinate company according to law and is only a branch of the company.

(2) The parent company's control over subsidiaries must meet certain legal conditions. The parent company's control over subsidiaries is generally not direct control, but indirect control, that is, it affects the production and operation decisions of subsidiaries by appointing and removing members of the board of directors of subsidiaries and making investment decisions. Branches are different in that their personnel, business and property are under the direct control of the subordinate company and are engaged in business activities within the business scope of the subordinate company.

(3) There are different ways of assuming liabilities. The parent company, as the largest shareholder of the subsidiary, is liable for the debts of the subsidiary in its business activities only to the extent of its contribution to the subsidiary; As an independent legal person, the subsidiary is liable for its operating liabilities to the extent of all its own property. Since the branch company does not have its own independent property, it conducts unified economic accounting with the subordinate company, so its liabilities in operating activities are paid off by the subordinate company, and the subordinate company is responsible for the debts of the branch company in operating activities to the extent of all its assets.

So although there is only one word difference between a subsidiary and a branch, the responsibilities and management methods of the company are different, so the entrepreneur should decide whether to open a branch or a subsidiary according to his actual needs.