Division (business)
Encyclopedia
A division of a business
entity is a portion of that business that operates under a different name. It is the equivalent of a corporation
or limited liability company
obtaining a fictitious name or "doing business as
" certificate and operating a business under that fictitious name. A division is different from a subsidiary
, in that a subsidiary is a separate legal entity owned by the primary business. A division is a part of the primary business, is not separate from that business, and the primary business is legally responsible for all of the obligations and debts of the division.
Generally, only an "entity", e.g. a corporation, limited liability company, etc. would have a "division"; an individual operating in this manner would simply be "operating under a fictitious name".
An example of this would be to look at Hewlett Packard (HP), the computer and printer company. HP has several divisions, with the printer division, that makes laser and inkjet printers, being the largest and most profitable division. The divisions of HP, like the Printing & Multifunction division, the Handheld Devices (includes the old calculator) division, the Servers division (mini and mainframe computers), etc., all use the HP brand name. But, Compaq
(a part of HP since 2002), operates as a subsidiary, using the Compaq brand name.
Mack Trucks
continues to run itself separately, but is a wholly owned subsidiary of AB Volvo. Volvo Trucks also sells trucks under the Volvo name. Within Mack, there is a division named Mack de Venezuela C.A. that does final assembly and sells trucks in South America.
Another more obvious example is that Google Video
is a division of Google
, and is part of the same corporate entity. But the YouTube
video service is a subsidiary of Google because it remains operated as YouTube, LLC, a separate corporation even though it is owned by Google.
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...
entity is a portion of that business that operates under a different name. It is the equivalent of a corporation
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
or limited liability company
Limited liability company
A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions...
obtaining a fictitious name or "doing business as
Doing business as
The phrase "doing business as" is a legal term used in the United States, meaning that the trade name, or fictitious business name, under which the business or operation is conducted and presented to the world is not the legal name of the legal person who actually own it and are responsible for it...
" certificate and operating a business under that fictitious name. A division is different from a subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
, in that a subsidiary is a separate legal entity owned by the primary business. A division is a part of the primary business, is not separate from that business, and the primary business is legally responsible for all of the obligations and debts of the division.
Generally, only an "entity", e.g. a corporation, limited liability company, etc. would have a "division"; an individual operating in this manner would simply be "operating under a fictitious name".
An example of this would be to look at Hewlett Packard (HP), the computer and printer company. HP has several divisions, with the printer division, that makes laser and inkjet printers, being the largest and most profitable division. The divisions of HP, like the Printing & Multifunction division, the Handheld Devices (includes the old calculator) division, the Servers division (mini and mainframe computers), etc., all use the HP brand name. But, Compaq
Compaq
Compaq Computer Corporation is a personal computer company founded in 1982. Once the largest supplier of personal computing systems in the world, Compaq existed as an independent corporation until 2002, when it was acquired for US$25 billion by Hewlett-Packard....
(a part of HP since 2002), operates as a subsidiary, using the Compaq brand name.
Mack Trucks
Mack Trucks
Mack Trucks is an American truck-manufacturing company and a former manufacturer of buses and trolley buses. A wholly owned subsidiary of Renault Véhicules Industriels since 1990, Mack Trucks is currently a subsidiary of AB Volvo. The company's headquarters are located in Greensboro, North Carolina...
continues to run itself separately, but is a wholly owned subsidiary of AB Volvo. Volvo Trucks also sells trucks under the Volvo name. Within Mack, there is a division named Mack de Venezuela C.A. that does final assembly and sells trucks in South America.
Another more obvious example is that Google Video
Google Video
Google Videos is a video search engine, and formerly a free video sharing website, from Google Inc. Before removing user-uploaded content, the service allowed selected videos to be remotely embedded on other websites and provided the necessary HTML code alongside the media, similar to YouTube...
is a division of Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
, and is part of the same corporate entity. But the YouTube
YouTube
YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
video service is a subsidiary of Google because it remains operated as YouTube, LLC, a separate corporation even though it is owned by Google.