Dotterbolaget

Dotterbolaget is the Swedish term for a subsidiary, a company that is controlled by another company, commonly referred to as the parent company. Control is typically achieved when the parent owns a majority of voting shares or has the ability to appoint the majority of the subsidiary’s board. A dotterbolag can be wholly owned or partially owned by the parent, and it may operate in a different line of business or geography from its parent.

A dotterbolag maintains its own legal personality and can enter into contracts, own assets, and incur liabilities in its own name. However, the parent company exercises significant influence over its strategic direction and governance, often through shareholding arrangements and board representation. The subsidiary may have its own management and local compliance requirements, while reporting lines typically connect to the parent’s corporate group.

In financial reporting, the dotterbolag’s results are usually consolidated into the parent’s group accounts, with intercompany transactions and balances eliminated in consolidation. Tax and regulatory treatment of subsidiaries varies by country, but the subsidiary generally remains a separate taxable entity with its own accounts.

Dotterbolag are commonly used to organize operations by market or function, isolate risk, comply with local regulations, or enable local financing and management while retaining a unified corporate strategy at the group level.