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26-689: MxV Rail (full legal name: Transportation Technology Center, Inc. ) is a subsidiary of the Association of American Railroads (AAR) which conducts railroad equipment testing and training for member railroads. From 1982 until October 2022, AAR managed operations at the Transportation Technology Center (TTC) as part of public-private partnership between AAR and the TTC's owner, the Federal Railroad Administration (FRA). The TTC

52-405: A corporate , although this term can also apply to cooperating companies and their subsidiaries with varying degrees of shared ownership. A parent company does not have to be the larger or "more powerful" entity; it is possible for the parent company to be smaller than a subsidiary, such as DanJaq , a closely held family company, which controls Eon Productions , the large corporation which manages

78-476: A definition that provides that "control" is "the capacity of an entity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of another entity so as to enable that other entity to operate with it in pursuing the objectives of the controlling entity". This definition was adapted in the Australian Corporations Act 2001 : s 50AA. Furthermore, it can be

104-404: A joint arrangement (joint operation or joint venture) over which two or more parties have joint control (IFRS 11 para 4). Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The Companies Act 2006 contains two definitions: one of "subsidiary" and

130-432: A judgment against the parent if they can pierce the corporate veil and prove that the parent and subsidiary are mere alter egos of one another. Thus any copyrights, trademarks, and patents remain with the subsidiary until the parent shuts down the subsidiary. Ownership of a subsidiary is usually achieved by owning a majority of its shares . This gives the parent the necessary votes to elect their nominees as directors of

156-455: A subsidiary undertaking, if: The broader definition of "subsidiary undertaking" is applied to the accounting provisions of the Companies Act 2006, while the definition of "subsidiary" is used for general purposes. In Oceania , the accounting standards defined the circumstances in which one entity controls another. In doing so, they largely abandoned the legal control concepts in favour of

182-433: A useful part of the company that allows every head of the company to apply new projects and latest rules. Share (finance) In financial markets , a share (sometimes referred to as stock or equity ) is a unit of equity ownership in the capital stock of a corporation. It can refer to units of mutual funds , limited partnerships , and real estate investment trusts . Share capital refers to all of

208-494: Is a railroad equipment testing facility located northeast of Pueblo, Colorado . AAR formed its Transportation Technology Center, Inc. (TTCI) subsidiary in 1998, and TTCI assumed the contract. In March 2021, TTCI lost the contract to operate the TTC, effective October 2022. In March 2022, AAR rebranded TTCI as MxV Rail, as it works to establish its own testing facility in Pueblo. The facility operations and maintenance for TTC has been

234-997: Is a subsidiary/child company of the ultimate parent company, while a second-tier subsidiary is a subsidiary of a first-tier subsidiary: a "grandchild" of the main parent company. Consequently, a third-tier subsidiary is a subsidiary of a second-tier subsidiary—a "great-grandchild" of the main parent company. The ownership structure of the small British specialist company Ford Component Sales, which sells Ford components to specialist car manufacturers and OEM manufacturers, such as Morgan Motor Company and Caterham Cars , illustrates how multiple levels of subsidiaries are used in large corporations: The word "control" and its derivatives (subsidiary and parent) may have different meanings in different contexts. These concepts may have different meanings in various areas of law (e.g. corporate law , competition law , capital markets law ) or in accounting . For example, if Company A purchases shares in Company B, it

260-482: Is not tax free. Further, Indian tax laws include provisions to stop dividend stripping . Historically, investors were given share certificates as evidence of their ownership of shares. In modern times, certificates are not always given and ownership may be recorded electronically by a system such as CREST or DTCC , a central securities depository . As of May 2022, the United States Supreme Court

286-497: Is possible that the transaction is not subject to merger control (because Company A had been deemed to already control Company B before the share purchase, under competition law rules), but at the same time Company A may be required to start consolidating Company B into its financial statements under the relevant accounting rules (because it had been treated as a joint venture before the purchase for accounting purposes). Control can be direct (e.g., an ultimate parent company controls

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312-464: The James Bond franchise. Conversely, the parent may be larger than some or all of its subsidiaries (if it has more than one), as the relationship is defined by control of ownership shares, not the number of employees. The parent and the subsidiary do not necessarily have to operate in the same locations or operate the same businesses. Not only is it possible that they could conceivably be competitors in

338-859: The AAR. 38°26′04″N 104°17′06″W  /  38.43444°N 104.28500°W  / 38.43444; -104.28500 Subsidiary The subsidiary can be a company (usually with limited liability ) and may be a government-owned or state-owned enterprise . They are a common feature of modern business life, and most multinational corporations organize their operations in this way. Examples of holding companies are Berkshire Hathaway , Jefferies Financial Group , The Walt Disney Company , Warner Bros. Discovery , or Citigroup ; more focused companies include IBM , Xerox , and Microsoft . These, and others, organize their businesses into national and functional subsidiaries, often with multiple levels of subsidiaries. Subsidiaries are separate, distinct legal entities for

364-665: The Pueblo Economic Development Corporation (PEDCO). The new facility would be in the PuebloPlex industrial park (site of the former Pueblo Chemical Depot ), just south of the TTC. In March 2022, the AAR announced that TTCI would be rebranded into MxV Rail, a name based on the mathematical formula for momentum : mass x velocity. At the PuebloPlex, MxV Rail plans to build a high-tonnage loop for accelerated service testing and curve negotiation loops, along with related infrastructure to support certification testing by

390-453: The first-tier subsidiary directly) or indirect (e.g., an ultimate parent company controls second and lower tiers of subsidiaries indirectly, through first-tier subsidiaries). Recital 31 of Directive 2013/34/EU stipulates that control should be based on holding a majority of voting rights, but control may also exist where there are agreements with fellow shareholders or members. In certain circumstances, control may be effectively exercised where

416-555: The marketplace, but such arrangements happen frequently at the end of a hostile takeover or voluntary merger. Also, because a parent company and a subsidiary are separate entities, it is entirely possible for one of them to be involved in legal proceedings, bankruptcy, tax delinquency, indictment or under investigation while the other is not. In descriptions of larger corporate structures, the terms "first-tier subsidiary", "second-tier subsidiary", "third-tier subsidiary", etc. describe multiple levels of subsidiaries. A first-tier subsidiary

442-474: The operations and maintenance contract to ENSCO , who assumed responsibility for research and development, testing, engineering, and training services at TTC from TTCI starting in October 2022. In addition, ENSCO plans to expand the use of TTC to support more general ground transportation research. In April, TTCI announced plans to build a new, independent research facility in Pueblo after reaching an agreement with

468-479: The other "subsidiary undertaking". According to s.1159 of the Act, a company is a "subsidiary" of another company, its "holding company", if that other company: The second definition is broader. According to s.1162 of the Companies Act 2006, an undertaking is a parent undertaking in relation to another undertaking, a subsidiary undertaking, if: An undertaking is also a parent undertaking in relation to another undertaking,

494-409: The ownership of shares is a dividend . There are different types of shares such as equity shares, preference shares, deferred shares, redeemable shares, bonus shares, right shares, and employee stock option plan shares. Shares are valued according to the various principles in different markets , but a basic premise is that a share is worth the price at which a transaction would be likely to occur were

520-468: The parent holds a minority or none of the shares in the subsidiary. According to Article 22 of the directive 2013/34/EU an undertaking is a parent if it: Additionally, control may arise when: Under the international accounting standards adopted by the EU a company is deemed to control another company only if it has all the following: A subsidiary can have only one parent; otherwise, the subsidiary is, in fact,

546-430: The purposes of taxation , regulation and liability . For this reason, they differ from divisions which are businesses fully integrated within the main company, and not legally or otherwise distinct from it. In other words, a subsidiary can sue and be sued separately from its parent and its obligations will not normally be the obligations of its parent. However, creditors of an insolvent subsidiary may be able to obtain

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572-446: The responsibility of a contractor since July 1972. Due to reduced funding that threatened to close TTC, the FRA entered a public-private partnership with AAR in 1982, who would take over "care, custody, and control" of the facility. AAR formed its TTCI subsidiary to administer the contract in 1998 and the contract was renewed periodically as a single-source award. In March 2021, the FRA awarded

598-430: The shares of an enterprise. The owner of shares in a company is a shareholder (or stockholder) of the corporation . A share expresses the ownership relationship between the company and the shareholder. The denominated value of a share is its face value, and the total of the face value of issued shares represent the capital of a company, which may not reflect the market value of those shares. The income received from

624-448: The shares offers limited control over the business if this is held by a majority shareholder. Tax treatment of dividends varies between tax jurisdictions. For instance, in India , dividends are tax free in the hands of the shareholder up to INR 1 million, but the company paying the dividend has to pay dividend distribution tax at 12.5%. There is also the concept of a deemed dividend , which

650-439: The shares to be sold. The liquidity of markets is a major consideration as to whether a share is able to be sold at any given time. An actual sale transaction of shares between buyer and seller is usually considered to provide the best prima facie market indicator as to the "true value" of shares at that particular time. A minority discount is usually applied when valuing a minority shareholding (less than 50%), where ownership of

676-460: The subsidiary, and so exercise control. This gives rise to the common presumption that 50% plus one share is enough to create a subsidiary. There are, however, other ways that control can come about, and the exact rules both as to what control is needed, and how it is achieved, can be complex (see below). A subsidiary may itself have subsidiaries, and these, in turn, may have subsidiaries of their own. A parent and all its subsidiaries together are called

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