Tyttäryhtiö

Tyttäryhtiö is a Finnish term that translates to "subsidiary company" in English. It refers to a business entity that is owned and controlled by another company, known as the parent company. The parent company typically holds a majority stake, often more than 50% of the voting shares, in the subsidiary. This ownership structure gives the parent company the power to influence or direct the subsidiary's operations and management.

Subsidiaries can be established for various strategic reasons. They might be created to enter new markets, to isolate certain business risks, to take advantage of tax benefits, or to manage specific product lines or divisions independently. The legal and financial structures of a subsidiary are distinct from its parent company, meaning it can enter into contracts, incur debts, and operate as a separate legal entity. However, the parent company often consolidates the financial results of its subsidiaries into its own financial statements.

The relationship between a parent and subsidiary is hierarchical. The parent company may appoint the board of directors and key management personnel of the subsidiary. While a subsidiary operates with a degree of autonomy, its ultimate strategic direction and major decisions are usually subject to the approval of the parent company. This structure allows large corporations to manage complex operations and diversify their business interests effectively. The term "tyttäryhtiö" is commonly used in Finnish business and legal contexts when discussing corporate structures and ownership.