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Understanding the Subsidiary Bank Holding Company: Legal Insights
Definition & Meaning
A subsidiary bank holding company is a type of company that is primarily controlled by another bank holding company. Specifically, it refers to any company where:
At least twenty-five percent of its voting shares are owned or controlled by a bank holding company.
The majority of its directors are elected with the influence of the bank holding company.
The bank holding company has the power to significantly influence the management or policies of the company.
Table of content
Legal Use & context
This term is commonly used in banking and financial regulation. It is relevant in contexts such as:
Banking regulations and compliance.
Corporate governance and control structures.
Financial reporting and disclosures.
Users may encounter this term when dealing with legal forms related to bank holding companies or when assessing corporate structures in the banking sector. Legal templates from US Legal Forms can assist in managing related documentation effectively.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A bank holding company owns 30 percent of a local bank's voting shares. This local bank is considered a subsidiary bank holding company.
Example 2: A corporation where the majority of its board members are appointed by a bank holding company, thus making it a subsidiary bank holding company. (hypothetical example)
Relevant laws & statutes
The primary legal reference for subsidiary bank holding companies is found in the Bank Holding Company Act of 1956, specifically under 12 USCS § 1841. This statute outlines the definitions and regulations governing bank holding companies.
Comparison with related terms
Term
Definition
Key Differences
Bank Holding Company
A company that controls one or more banks.
Does not necessarily have a subsidiary relationship.
Financial Holding Company
A type of bank holding company that can engage in a broader range of financial activities.
Includes financial services beyond banking.
Common misunderstandings
What to do if this term applies to you
If you are involved with a subsidiary bank holding company, consider the following steps:
Review your company's ownership structure to determine compliance with regulations.
Consult legal professionals for guidance on governance and regulatory requirements.
Utilize US Legal Forms to access templates for necessary documentation and compliance forms.
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