Parent Corporation

Parent Corporation means:
a company that owns or controls one or more subsidiary corporations through the ownership of voting stock. Business with a substantial participation in the share capital of another business, called the subsidiary. A parent company is usually an operating company in its own right; when it has no business of its own, the name holding company is often preferred. For consolidated tax return purposes, the common parent must directly own at least 80% of both the total voting power of all classes of stock entitled to vote and the total value of the stock (other than preferred stock) of at least one of the other corporations in the group. Former IRC (check if this IRC provision is current here) § 1504(a). A parent, for purposes of the controlled group of corporations provision, can be established by either an 80% voting power test or an 80% value test. Former IRC (check if this IRC provision is current here) § 1563(a)(1). For purposes of the parent-subsidiary relationship for redemptions, however, the control percentage is only 50%.