Maastricht Global Business Practice Test 2025 - Free Global Business Practice Questions and Study Guide

The defining characteristic of a wholly owned subsidiary is that a single investor is the sole owner of the entity. This means that the parent company has complete control over the subsidiary's operations, decisions, and financial performance without needing approval or cooperation from other shareholders or partners. This structure allows for streamlined decision-making and a clear strategic direction as the parent company can implement its policies and practices without outside interference.

In contrast, the other options involve shared ownership or control, which fundamentally contradicts the concept of a wholly owned subsidiary. When multiple investors share ownership, or when control is shared with local partners or government entities, the subsidiaries lose the "wholly owned" designation, as they would not be under the sole ownership or complete control of a single company. This emphasizes the importance of ownership structure in determining the level of control and operational autonomy within corporate entities.