How Do I Set Up a Parent Company with a Subsidiary?

A parent company owns smaller companies called subsidiaries.
Subsidiaries operate as extensions of the parent company.
To create subsidiaries, form each one by filing documents listing the parent company as owner.
Subsidiaries commonly structure as corporations or LLCs to limit liability and allow parent control.
Parents must provide identities of directors and shareholders when registering a foreign subsidiary.
Wholly-owned subsidiaries are fully owned by the parent.

The holding company structure helps confine liability for each asset to the asset.
One LLC is organized to serve as the parent holding company.
An LLC holding company is taxed as a pass-through entity.
Starting an LLC holding company includes choosing a registered agent and filing articles of organization with the state.

First, obtain authorization from the parent company’s board of directors or management to establish the subsidiary.
Choose a suitable business structure, like a corporation or LLC, considering factors including liability protection and taxes.
Complete necessary procedures to legally and regulatorily incorporate the subsidiary.

Acquire or create subsidiaries to become a parent LLC, qualifying it by possessing subsidiaries.
A subsidiary operates independently regarding management, operations, finances, and legal structure but parental ownership and control.