To limit an existing operation's potential loss exposure, the operation would usually use the subsidiary form of organization when expanding rather than the branch form of organization.

Question

Quizplus · Accepted Answer

Using a subsidiary form of organization allows a parent company to limit its liability exposure because the subsidiary is a separate legal entity, whereas a branch is not legally separate from the parent company, making the parent fully liable for the branch's actions and debts.

To Limit an Existing Operation's Potential Loss Exposure, the Operation