In corporate structures, which term describes a company that is completely controlled by another company?

• A. A joint venture between two firms
• B. A franchise
• C. A company operates independently
• D. A company completely controlled by another company

Answer: (D)

The concept being tested is how control is structured in corporate groups. When one company owns all or almost all of another company’s voting shares and can dictate policy and appoint the board, that second company functions as a subsidiary of the first. If the parent owns all of it, it’s a wholly owned subsidiary, the strongest form of control.

The description given—“a company completely controlled by another company”—captures that exact relationship. In practice, we call the relationship a subsidiary, with the strongest form being a wholly owned subsidiary.

The other scenarios describe different arrangements: a joint venture is a separate entity created and governed by two or more firms; a franchise is a licensing arrangement where the franchisee operates under the franchisor’s brand and system; a company operating independently has no controlling parent.