sidusettevõte

Sidusettevõte is an Estonian term that translates to "subsidiary company" or "affiliated company." It refers to a business entity that is owned or controlled by another, larger company, known as the parent company. This relationship is established when the parent company holds a significant stake in the subsidiary, typically more than 50% of the voting stock, allowing it to exert control over the subsidiary's operations and management.

The establishment of sidusettevõte can serve various strategic purposes for a parent company. It might be used to enter new markets, diversify product lines, or segregate specific business activities to manage risk more effectively. Subsidiaries can operate with a degree of autonomy, allowing them to specialize and adapt to their particular markets or operational needs, while still benefiting from the resources and backing of the parent organization.

From a legal and financial perspective, a sidusettevõte is a separate legal entity, meaning it has its own assets, liabilities, and legal obligations. This separation is important for limiting the liability of the parent company. Financial reporting often involves consolidating the results of sidusettevõte into the parent company's financial statements, providing a comprehensive view of the overall group's performance. The specific degree of control and the nature of the relationship between a parent and its sidusettevõte can vary, but the core concept remains that of a controlled entity within a larger corporate structure.