Question

Wholly owned subsidiaries means establishing a firm that is jointly owned by two or more independent firms. (State with reason whether the given statement is true or false)

Answer 1

Yes, the statement is true.  

Wholly owned subsidiaries are those company whose common stock is cent per cent owned by another company, the parent company.

It should be kept in mind that a company can become a wholly owned subsidiary via an acquisition made by the parent company.

In fact, a regular subsidiary is 51% to 99% owned by the parent company.

The parent company can introduce an affiliate or even an associate company at the time when lower costs and risks are desirable.