A division, sometimes called a business sector or business unit (segment), is one of the parts into which a
business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for ...
,
organization
An organization or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences) is an legal entity, entity—such as ...
or
company
A company, abbreviated as co., is a Legal personality, legal entity representing an association of legal people, whether Natural person, natural, Juridical person, juridical or a mixture of both, with a specific objective. Company members ...
is divided.
Overview
Divisions are distinct parts of a business. If these divisions are all part of the same company, then that company is legally responsible for all of the obligations and debts of the divisions.
In the banking industry, an example would be
East West Bancorp and its primary subsidiary,
East West Bank.
Legal responsibility
Subsidiaries are separate, distinct
legal entities for the purposes of
taxation,
regulation
Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. Fo ...
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. The ''
Houston Chronicle
The ''Houston Chronicle'' is the largest daily newspaper in Houston, Houston, Texas, United States. it is the third-largest newspaper by Sunday circulation in the United States, behind only ''The New York Times'' and the ''Los Angeles Times''. ...
'' highlighted that the creation of a division "is substantially easier than developing subsidiaries. Because a division is an internal segment of a company, not an entirely separate entity, business owners create and end divisions at their whim. Also, because individuals in each division are employed by the same company, it's easier to modify staffing to fit with this setup".
See also
*
Brand
*
Subsidiary
A subsidiary, subsidiary company, or daughter company is a company (law), company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidia ...
References
Types of business entity
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