Port communicationWhat is the difference between a branch and a subsidiary? I believe every company knows this，A branch of a registered company is a branch or affiliated institution directly engaged in business operations under the head office.。Although the branch has the word "company" on it，But it's not a real company。Because the branch does not have corporate legal personality，Does not have independent legal status，Do not bear civil liability independently。But how are specific company accounts handled?
- The specific characteristics of branches are as follows:： ①The branch does not have its own independent property，its actual possession、The property used is part of the parent company's property，included in the balance sheet of the parent company。 ②The branch does not bear civil liability independently。 ③A branch is not a company，Its establishment does not need to follow company establishment procedures，It can be established after completing simple registration and business procedures.。
④The branch does not have its own articles of association，There is no board of directors and other forms of company management decision-making and business execution organs。 ⑤Branch name，Just add the word "branch" after the name of the head office.。 Branches can be accounted for independently or non-independently.。 A subsidiary is a legal concept corresponding to a parent company。A parent company refers to a company that owns more than a certain proportion of the shares of another company or that can exercise actual control over another company through an agreement.。
A subsidiary refers to a company that has more than a certain proportion of its shares owned by another company or is actually controlled by another company through an agreement.。The subsidiary has legal personality，Can independently bear civil liability。This is the important difference between a subsidiary and a branch。Subsidiaries are accounted for independently。 Independent accounting refers to a comprehensive accounting of the unit’s business operations and results.、Systematic accounting。
The characteristics of independent accounting units are：Have an independent organizational form in management，Have a certain amount of funds，Open an account at a local bank;Carry out business activities independently，Able to enter into economic contracts with other units;Independently calculate profit and loss，Set up a separate accounting agency and staff accounting personnel，And have a complete accounting work organization system。
Non-independent accounting is also called the accounting system，It is the daily business information related to the business operations of the unit.，Report to superior units on a daily or regular basis，Accounting by superior units。The characteristics of non-independent accounting units are：Generally, a certain amount of working capital is allocated by superiors，Engage in business activities，All income is fully surrendered，All expenses are reported to superiors，It does not calculate profit and loss separately，Only record and calculate a few major indicators，Perform simple calculations。
In accounting processing，There are also obvious differences between branches and subsidiaries。
when investing，The head office’s investment in the branch is not recorded as a long-term investment，Should be accounted for in current accounts，Many companies adopt the method of setting up internal transactions accounts at the head office and branches.，Offsetting when preparing summary reports;The head office’s investment in its subsidiaries should be recorded as long-term investment，Long-term investments are offset against owners' equity when preparing consolidated financial statements.；upon receipt of investment，Branches should not have owners' equity accounts，All transactions should be accounted for internally；The subsidiary should record the investment received in the paid-in capital account，And carry out relevant accounting processing according to the financial system；at the time of profit distribution, The profit formed by the branch is the profit of the head office，No resolution required when handing over profits，Just do the accounting directly, The profits generated by the subsidiary belong to the income of all shareholders，There must be a board resolution before distribution can be made，Although it is a wholly-owned subsidiary, relevant procedures should still be supplemented when distributing.
About Hong Kong Xintong
Hong Kong Xintong focuses onGuangdong and Hong Kong license plates、Shenzhen Hazardous Chemicals Business License、Shenzhen labor dispatch licenseandShenzhen Charity Foundationapplication services，Assist customers to applyShenzhen travel agency business license、Shenzhen pawn shop business license、Shenzhen auction house license and other mainstream domestic financial licenses，Support enterprises to achieve compliance expansion of cross-border financial business。Also availableODI overseas investment registration、International travel agency registration and other services，Help enterprises expand their presence in international markets。Provide one-stop compliance solutions for enterprises。To learn more，Please contactHong Kong Information Communications Consultant。
