A subsidiary may be wholly owned, or partially owned. A wholly owned subsidiary is one in which the parent owns 100% of the outstanding stock of the subsidiary corporation. A corporation that owns more than 50% percent of the common stock of another corporation is said to be the parent company of that subsidiary corporation.
             Generally a parent/subsidiary relationship between two corporations is thought to exist when all of the following conditions are met:
             The two entities are treated as separate and distinct financial entities
             The subsidiary is formed with sufficient assets to conduct normal business operations.
             The two entities maintain separate books and records
             The two corporations have different officers...even if they share some or all of the same Board of Directors.
             The corporations do not commingle assets
             The corporations do not represent themselves to the general public as being the same company or business entity. Instead, the corporations take pains to identify the parent corporation and its subsidiary [or subsidiaries] as separate and distinct --- meaning among other things that neither corporation is responsible for the debts of the other.
             An important exception exists when a parent company signs an inter-corporate guarantee [sometimes called a cross-corporate guarantee] obligating itself for the debts of its subsidiary. If you are asked to sell to a corporation and determine that is not creditworthy, if the applicant is a subsidiary of a creditworthy parent company one way to reduce credit risk is to require the parent company to sign an inter-corporate guarantee. Ideally, such a guarantee would include the following terms:
             It would be a general, unconditional and continuing guaranty
             It would remain in effect until the balance due was paid in full
             The guaranty would acknowledge that it was being signed for valuable consideration involvi
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