If one company owns more than 50% of the common stock of another company:

Question

Quizplus · Accepted Answer

If one company owns more than 50% of the common stock of another company, a parent-subsidiary relationship exists. This means that the owning company is the parent and the owned company is the subsidiary. The parent company has control over the subsidiary company and consolidates the subsidiary's financial statements into their own. The equity method may be used if the ownership is between 20% and 50%, but if it's over 50%, a different method of accounting is needed. Partnerships involve joint ownership and would not be applicable in this scenario. Liquidation is not necessary unless the subsidiary is facing financial distress or there is another valid reason for dissolution.

If One Company Owns More Than 50% of the Common