Parent Subsidiary Group Law and Legal Definition
A parent/subsidiary controlled group takes into account ownership of one entity (corporations, partnerships, and sole proprietorships) by another.
To define "entities under common control" for single business tax purposes, the parent-subsidiary group of entities under common control means one or more chains of organizations conducting trades or businesses connected through ownership of a controlling interest with a common parent organization and the following conditions exist:
- A controlling interest in each of the organizations, except the common parent organization, is owned (directly and indirectly) by one or more of the other organizations; and
- The common parent organization owns (directly and indirectly) a controlling interest in at least one of the other organizations, excluding, in computing such controlling interest, any direct ownership interest by such other organizations.
According to NASDAQ Rule 7027, a wholly owned subsidiary is defined as "a subsidiary of a member, 100% of whose voting stock or comparable ownership interest is owned by the member, either directly or indirectly through other wholly owned subsidiaries."