Legal Question in Business Law in Maryland

Re: Creating Legal Entities

By a decision of the parent company's board of directors and the formation of the subsidiary corporation. It stock would typically be held by the parent company.

Re: Creating Legal Entities

Depending on the structure of the overall corporate entity, subsidiaries can be formed through creation or acquired. Conglomerates can be formed amongst corporations through partnership agreements. All actions for forming subsidiaries are through the articles of the acquiring or adopting corporation and generally require passage through the board of directors. Votes can be set upon those holding shares for acquisitions or mergers; however, other means often dictate usual practice.

If you are considering the formation of subsidiaries under the umbra of a C-corp, you should speak with an attorney. Tax ramifications as well as liability concerns require resolution.

G. Joseph Holthaus III

(410) 799-9002

Re: Creating Legal Entities

The parent company's board of directors votes on a resolution approving the creation of the subsidiary. The next step would be to submit articles of incorporation for the subsidiary to the department of state/division of corporations for the state within which the parent company wishes to incorporate the subsidiary. For example, while Comcast Corporation is incorporated in Pennsylvania, its telephone company subsidiary that operates in Virginia is incorporated in Virginia.