Division (business) explained

A division, sometimes called a business sector or business unit (segment), is one of the parts into which a business, organization or company is divided.[1]

Overview

Divisions are distinct parts of a business. If these divisions are all part of the same company, then that company is legally responsible for all of the obligations and debts of the divisions.[2] [3]

In the banking industry, an example would be East West Bancorp and its primary subsidiary, East West Bank.[4]

Legal responsibility

See also: Subsidiary. Subsidiaries are separate, distinct legal entities for the purposes of taxation, regulation and liability. For this reason, they differ from divisions, which are businesses fully integrated within the main company, and not legally or otherwise distinct from it.[5] [6] The Houston Chronicle highlighted that the creation of a division "is substantially easier than developing subsidiaries. Because a division is an internal segment of a company, not an entirely separate entity, business owners create and end divisions at their whim. Also, because individuals in each division are employed by the same company, it's easier to modify staffing to fit with this setup".[7]

See also

Notes and References

  1. Book: Longman business English dictionary. . 2000 . Longman . Harlow . 9780582306073 . 138.
  2. Web site: Differences Between Wholly Owned Subsidiaries & Divisions . SmallBusiness.Chron . 17 March 2019.
  3. Web site: Picincu. Andra. August 10, 2020. Business Organizational Structure Examples. live. 2021-10-11. Houston Chronicle. https://web.archive.org/web/20111229031826/http://smallbusiness.chron.com:80/business-organizational-structure-examples-20580.html . 2011-12-29 .
  4. Web site: East West Bank Press Release First Quarter 2019. April 18, 2019. October 11, 2022. September 21, 2019. https://web.archive.org/web/20190921142046/http://investor.eastwestbank.com/file/Index?KeyFile=397569677. dead.
  5. Book: Lehman . Jeffrey . Phelps . Shirelle . West's Encyclopedia of American Law, Vol. 9 . 2 . 2005 . Thomson/Gale . Detroit . 9780787663742 . 387.
  6. Web site: Reed. Eric. February 12, 2019. What Is a Subsidiary and What Do You Need to Know When Starting One?. live. 2021-10-11. TheStreet. en-us. https://web.archive.org/web/20210131030732/https://www.thestreet.com/markets/corporate-governance/what-is-a-subsidiary-14862236 . 2021-01-31 .
  7. Web site: October 5, 2021. Lateral Structural Arrangements in Organizations. live. 2021-10-11. Houston Chronicle. https://web.archive.org/web/20120912072635/http://smallbusiness.chron.com:80/lateral-structural-arrangements-organizations-23406.html . 2012-09-12 .

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