A BRANCH AND A SUBSIDIARY

A branch is where a new location, division, department, or office is set up, still under the original company’s name and is still part of that legal entity. It is a part of a company that is organized so as to conduct business on behalf of a company, as opposed to carrying on business that is merely supplementary or incidental to the company’s business as a whole. The branch liabilities extend to the main/parent company.

Is where a company sets up a new company and registers the legal entity with the local authority as a stand-alone company. A subsidiary is a separate legal entity from the parent, although owned by the parent corporation. A company may form a subsidiary either by purchasing a controlling interest in an existing company or creating the company itself through a new registration. The liabilities of the subsidiary are limited to subsidiary though may extend to parent company if the parent has a tangible and active role on the liability. The suit however addresses both separately.