A Disadvantage of Creating a Foreign Subsidiary Is the Loss

question 202

True/False

A disadvantage of creating a foreign subsidiary is the loss of control over technology and expertise used in the production of the product.

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Definitions:

Proprietorship

An unincorporated business firm owned by just one person.

Corporation

A legal entity that is separate from its owners, offering limited liability to its shareholders, and having the ability to enter into contracts, loan and borrow money, sue and be sued.

Financial Intermediary

An institution that facilitates the channeling of funds between lenders and borrowers, such as banks, investment funds, and insurance companies.

Loan Syndicates

Groups of banks or financial institutions that come together to provide a large loan to a single borrower, spreading the risk among them.