Subsidiary

A subsidiary is like your baby brother or sister, who is smaller and younger than you but still part of your family. Just like your family, a big company can have many smaller and younger companies that it owns and controls, and these are called subsidiaries.

Let's say that a big toy company named ToyCo wants to expand its business beyond just making toys. So, it decides to buy a smaller company called GameCo, which makes video games. ToyCo now owns all of GameCo's assets (like its buildings, equipment, and intellectual property) and can make all the decisions on how GameCo will operate.

By owning GameCo, ToyCo can now offer video games alongside its toys or even use GameCo's expertise in creating video games to make better toys. However, even though ToyCo owns GameCo, they may still operate independently, just like how you are your own person even though you are part of your family.

In short, a subsidiary is a smaller and younger company that is owned and controlled by a bigger company, just like a baby brother or sister in a family.