Branch
The parent entity generally remains responsible for the branch’s business, subject to the applicable legal framework. A branch can have local management, records, registration and tax obligations without becoming a separate company. Distinguish legal identity from geographic location or managerial autonomy. A subsidiary is a separate entity controlled by a parent, while a branch is not created merely by purchasing shares in another company. Cross-border expansion analysis must examine liabilities, regulation, tax, financing and remittance rules for the actual structure rather than assume one form is always preferable.
Worked example
A company opens an overseas office as a registered branch. Local accounts support administration, but their existence does not by itself create a second incorporated company.
Common mistake
Calling any overseas operation a subsidiary or assuming a branch cannot have local management and reporting duties.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AFM | Supporting | September 2026–June 2027 |