Finance:Division (business)
A division, sometimes called a business sector or business unit (segment), is one of the parts into which a business, organization or company is divided.[1]
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.[1][2][3]
In the banking industry, an example would be East West Bancorp and its primary subsidiary, East West Bank.[4]
Legal responsibility
Subsidiaries are separate, distinct legal entities for 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.[5][6] The Houston Chronicle 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".[7]
See also
References
- ↑ 1.0 1.1 Longman business English dictionary.. Harlow: Longman. 2000. p. 138. ISBN 9780582306073.
- ↑ "Differences Between Wholly Owned Subsidiaries & Divisions". https://smallbusiness.chron.com/differences-between-wholly-owned-subsidiaries-divisions-32631.html.
- ↑ Picincu, Andra (August 10, 2020). "Business Organizational Structure Examples". https://smallbusiness.chron.com/business-organizational-structure-examples-20580.html.
- ↑ "East West Bank Press Release First Quarter 2019". April 18, 2019. http://investor.eastwestbank.com/File/Index?KeyFile=397569677.
- ↑ Lehman, Jeffrey; Phelps, Shirelle (2005). West's Encyclopedia of American Law, Vol. 9 (2 ed.). Detroit: Thomson/Gale. p. 387. ISBN 9780787663742.
- ↑ Reed, Eric (February 12, 2019). "What Is a Subsidiary and What Do You Need to Know When Starting One?" (in en-us). https://www.thestreet.com/markets/corporate-governance/what-is-a-subsidiary-14862236.
- ↑ "Lateral Structural Arrangements in Organizations". October 5, 2021. https://smallbusiness.chron.com/lateral-structural-arrangements-organizations-23406.html.
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