Unlike joint ventures, wholly owned affiliates are:
A) created by merging two or more companies.
B) disadvantageous because the parent company has no control over the quality of products.
C) fully owned by their parent company.
D) advantageous because the parent company has no liability for any losses incurred by the wholly owned affiliates.

Question

Quizplus · Accepted Answer

Wholly owned affiliates are entities that are fully owned and controlled by their parent company. This means that the parent company has full control over the operations of the affiliate and can make decisions without the need for consensus or agreement with another company. This can be advantageous because it allows for greater control over the quality of products and services, as well as the ability to fully capture profits. However, the parent company also takes on all the liability for any losses incurred by the affiliate.

Unlike Joint Ventures, Wholly Owned Affiliates Are