Final answer:
A parent-subsidiary relationship is created when one entity holds more than 50% of the voting interests in another, not typically from tax-free reorganizations, vertical or horizontal business combinations.
Step-by-step explanation:
A parent-subsidiary relationship most likely arises from greater than 50% ownership of the voting interest of another entity. This is because when one company or entity holds a majority of the voting stock in another company, it has the power to exert control over that company, effectively creating a parent company (the controlling entity) and a subsidiary (the controlled entity). This is distinct from a vertical or horizontal business combination, which relates more to companies merging or acquiring businesses in the same industry (horizontal) or in different stages of production (vertical).
Moreover, corporations may join together in an association for various reasons, including the fact that there is strength in numbers, they may have common issues affecting an entire industry, and they can collectively benefit from governmental policies.
A trust in business terms refers to a legal arrangement where trustees hold and manage assets or businesses on behalf of investors. Vertical integration is a growth strategy where a company acquires other companies involved in various stages of the production and distribution of its products. By merging vertically, a company can protect itself against the loss of suppliers and streamline its production process to increase efficiencies and control costs.