Actually that is not true. Sure there is some ambiguity between the two terms, subsidiary and division, but they are used differently. A division of a Megacorp is part of the main body of that corp, it doesn't seem to be independent. A subsidiary, on the other hand, seems to have a certain amount of autonomy from the parent megacorp, such as its own ceo, board of directors, market shares, etc.

The interesting thing is that some Megacorps have division and others have subsidiaries. In fact Renraku has divisions that have their own subsidiaries. This is how I have understood the difference based on what is in Corporate Download.

Veracusse

Correct. A corporate facility must fulfill two requirements to receive the benefits of extraterritoriality:

- It must be officially recognized and marked as belonging to the extraterritorial corporation. A secret shell company operating as an Ares front does not receive extraterritoriality benefits. An AresArms factory or a Mercury Express courier truck would receive the benefits of extraterritoriality, because these are both publically recognized parts of Ares Macrotechnology.

- It must be physically demarcated from the area around it. The inside of the Mercury Express truck is a discrete location from the outside and the AresArms factory has a chainlink fence marked with signage indicating who owns it. On the other hand, a tent in the middle of the Mojave with an Ares sign out front or a stall in an open-air market is probably not sufficient to claim extraterritoriality. It appears that leased land can be extraterritorial, but I'm not sure how that would apply to something like a skybox at a football stadium (although it is fairly clear that a skybox where a corporate executive had simply rented it for the day would not receive the benefits, it's less clear what would happen if the corporation leased the box for a longer term -- say, a year or two).

As for subsidiary vs. division, as someone said before, a subsidiary is a more autonomous unit; basically, it's an entirely different corporation, but the majority of its stock is owned by the parent corporation (ie, "a wholly-owned subsidiary of BlahCorp" means BlahCorp owns all the stock). The subsidiary has its own CEO/CFO/COO and board of directors, although obviously the parent corporation has most of the say as to who that will be. However, if it's not a wholly-owned subsidiary, they wouldn't have complete control. A division would be part of the company that still still reports to the company's board and CEO. For instance, BlahCorp has a Financial Services division, which still reports to the BlahCorp board and CEO. Usually, this would be led by a senior VP. I'm not sure how AresArms is related to Ares Macrotech, but I thought it was a division.

Acts of Great Dragon are not covered by insurance.

~J

That's not necessarily true. Shiawase, for instance, has Shiawase Atomics, Shiawase Envirotech, etc, and they are clearly stated to be divisions, not subsidiaries. As for Ares, I'm not sure how they are broken down; AresArms, AresSpace, and Knight Errant are large enough entities that they could easily qualify as a special case though, which is why I wasn't sure. If Corporate Shadowfiles or Corporate Download says it's a subsidiary though, then that's obviously what it is.

It depends. I'm here assuming the wording used in the books are the right ones. To be as clear as possible, what I call an internal division is a plate on the door for the corp's administration to organize ; an external division is a subsidiary taking care of all the business in a certain geographic or business sector.

Ares Arms, AresSpace, AGE, KE, GM are corporations owned by Ares Macrotechnology. Ares UCAS, Ares CAS, Ares Europe... are seemingly internal divisions of Ares Macrotechnology (there's only one isolated blurb in Corporate Shadowfiles mentionning Ares UCAS stock on quotation).

Aztechnology North America, South America, Europe, Africa, Asia and Australasia are internal regional divisions of Aztechnology. PEMEX, Medicarro, Dassault are corporations owned of Aztechnology.

Mitsuhama Computers, Mitsuhama Automatronics, Mitsuhama Media and so on are corporations owned by Mitsuhama Computer Technologies that I imagine are working as external functional divisions. MCT itself may have internal regional divisions.

Renraku America, Renraku Asia, Renraku Australiasia and Renraku Europa are corporations owned by Renraku Computer Systems, acting as external regional divisions. Renraku Computer Systems has managers, lawyers and accountants who are probably working also within internal divisions mirroring the real ones (there's some lines in the corner of page 76 and 78 of Corporate Download who quite clearly describe this).

Shiawase Biotech, Shiawase Envirotech and Shiawase Atomics are seemingly internal divisions of Shiawase Corporation. Again, one line contradict this, in Corporate Download, one saying Shiawase Armaments is a subsidiary of Shiawase Atomics ; for Shiawase Atomics to own something, it had to be a corporation by itself. Stuff like Fuchi Simsense Studio or Ressha Corp are subsidiaries of Shiawase Corp.

Yamatetsu Corporation has internal regional divisions. MetaErgonomics, Crashcart and the likes are corporations owned by Yamatetsu Corp.

Cross Applied Technologies' structure is similar to either Shiawase or Renraku. Cross Matrix Technologies, Cross Advanced Eletronics, Cross Biomedical... are listed as divisions, but a part of CDL text says Dawn Devlepment and Virtual Air are "owned" by CMT, Fleche Armaments by CAE ; as said above, for them to own something, they'd have to be corporations.

Novatech and Wuxing have internal regional divisions. Wuxing Inc. owns two corporations, Wuxing Financial Services and Wuxing Worldwide Shipping, who may be acting as external functional divisions.

My personal take on your info:

The holding LLC does not own enough interest in the partner companies to qualifiy as a controlling partnership. It does qualify as a joint venture project.

A modern example of this: Sunoco & United each cede 10% of their resources for a research project. They each own 50% of the joint venture and even if the JV later buys stock in the parent companies it is still evenly owned by them.

What I mean by all that jargon, your holding LLC does not control much of it's partners assets and unless the assets it control are worth enough for AA status can it achieve that level. Also, since it does not control enough in the partner companies it can never grant them extraterritoriality even if its a AA.

The partners could switch some of there vital ops over to the joint venture and protect those assets but that's about it.

Just my take on it.

Stability could be summed as the cash reserves and long-term earnings forecasts. Since Zurich-Orbital exchanges corp scrip, the Corporate Court is likely to make sure megacorporations can repay for a sizeable amount of the scrip they issue. It should be near impossible (near) for a megacorporation to go bankrupt and disappear, leaving thousands of corporate citizens and extraterritorial compounds, armed forces and off-limit assets (space stations or naval vessels) stateless out in the open.

Infightings make a corp less efficient overall, but it does not have a specific effect on this. Note that fuchi did not crumble or went bankrupt. It broke up. Fuchi Industrial Electronics was a lame multinational present only in Europe and Africa but it was not dying. Korin Yamana just decided that he was too old to rebuild the empire he wanted and sold out to the Shiawase instead. A point seemingly missed by the authors in the whole plot is that, even at low price, to acquire most of Fuchi America and Fuchi Asia, Villiers and Renraku had to pay something. From this point of view the two real blow for Fuchi were the lost of JRJ International AAA share in Zurich-Orbital, and the preferred rates going with it, and the reparations paid to Renraku when it was proved Miles Lanier conducted industrial espionnage within Renraku on the behalf of Fuchi. The Corporate Court wants megacorps to be stable, it also wants to be able to really hurt them when it wants to.

And it's also the only way I found to make sense of those crappy corporate asset ratings rules that overate corp "good at nothing, bad at everything" at the expense of specialized leaders. The business model of Shadowrun seems to be very different from nowadays. IRL, there's a balance between two different casts, the industrial and the financial groups. Each handles cash very differently. In SR the divide no longer stands. Financial groups are almost absent from the frontline, and megacorps includes their own financial branch (in particular Saeder-Krupp, but it might mean Lofwyr brought in really huge cash reserves). It's instead indeed very similar to the Japanese economic model inherited from Zaibatsu and Keiretsu. The difference between a simple A multinational and a megacorp worthy of its AA rating would be that with interests in agriculture, consumer goods, natural ressources, military equipment, aeronautics, space conquest, pharmaceuticals, buildings and real estate, all over the world, the megacorps would nearly always be able to compensate one or several negative market trends with the rest, when a crisis in one ot its core business or geogrpahic market will put a multinational in a critical condition.

Considering the way certain parts of Shiawase are broken down by the family member who owns the corporation, it's possible that saying "Shiawase Armaments is a subsidiary of Shiawase Atomics" is just to indicate which sphere of influence it's in. I know, it's a stretch at best, but it might be a good retcon. It's possible that Shiawase could have some funky corporate structure where each division has a Mergers and Acquisitions department, but that would be....odd and redundant, to say the least.

Aside from the good point about GM prerogatives above, no way to get it the way you described. So to speak, when the Corporate Court grants extraterritoriality, there's room on the paper for only one name (so that in the end, there's one name to put on the signs). And this name has to belong to a legit incorporated company, not some amical club or loose association of wills. The very fact that each of the three company retains all the way an independant decision capability in the end precisely prevent it from being considered as a single entity, no matter how you engineer the whole thing. If each is free to leave overnight, it means the group can lose one third of its strength overnight as well (and two third if it's a really bad night), and that is not stability. Your conditions are mutually exclusive: for the company to remain independant, you need to have have half-and-one of the stock to be owned by the family (actually even two third to be sure) ; for the company to benefit from extraterritoriality, you need half-and-one of the stock to be owned by a megacorp. Mathematically impossible to staisfy simultaneously.

I'm not an expert, just an amateur, but eventually... if the Corporate Court accept to grant extraterritoriality to a corporation that have golden shares, and each owns at least 75% of their companies. Tylon, Shinkon and Wayler could then create the company TSW, and design three merger plans that give them a golden share of TSW with a veto right over every decision concerning their ex-company, in exchange for half of the stock. Thus, TSW would own 50% (I round down) of Tylon Industries, Shinkon Banks and Wayler Shipping.
With this structure, TSW weights half the financial weight of the three companies together. So it would reach AA size when each of the three companies is about two-third the size of an AA. Each of the three families receive two-third of the dividends from their own companies, and one sixth from the two other.
If let say Mr.Tylon disagrees about a decision TSW board is about to takes concernign Tylon Industries (which can occur if Shinkon and Wayler unite against him), his golden share allows him to block everything. TSW is then unable to intervene at Tylon Industries' shareholding meetings, and Tylon can control the thing with the 25% he retained (since 50% of the vote held by TSW are immobilized by his golden share's veto). If the two other untied once again him, he'd better withdraw from the group by voting for Tylon Indutries to emit 50% more of Tylon Industries stock, selling its stake in TSW and buying the new Tylon shares with the money. He'll be back again as the only one controlling Tylon Industries, who'd lose extraterritoriality, and TSW and thus the two other families would still own 33% of his company (and get that third of his dividends). Of course this is a theoritical example that assume the three companies have the exact same size.

Actually, I'm wondering if Fuchi did not have an arrangement similar to this, as there was an agreement that put and kept Nakatomi heading Fuchi Asia, Yamana Fuchi Pan-Europa and Villiers Fuchi America. The only difference is that the three divisions of Fuchi still shared some assets (Fuchi Corporate Security, Fuchi Orbital, delta level cybernetic research, subsdiaries from one division resorting to products and services from another) who were the battlefield were infightings took places.