tütarühistu

Tütarühistu is an Estonian term that translates to "subsidiary company" in English. It refers to a business entity that is owned or controlled by another company, known as the parent company. The parent company typically holds a majority stake in the subsidiary, allowing it to exert significant influence over its operations, management, and strategic decisions.

Subsidiaries can be established for various reasons. They might be created to segregate different business lines, enter new markets, or manage specific assets or liabilities. This structure can provide legal and financial advantages, such as limiting the liability of the parent company to the assets of the subsidiary. It can also facilitate tax planning and operational efficiency.

The relationship between a parent company and its tütarühistu is defined by ownership and control. While the subsidiary operates as a separate legal entity, its ultimate direction often aligns with the broader objectives of the parent. This control can be exercised through appointing members to the subsidiary's board of directors, approving major strategic initiatives, or through direct management oversight. Understanding the concept of a tütarühistu is crucial in the context of Estonian corporate law and business practices.