If I am running a business in the US and I want to set up shop in Canada or France, I have to register a second business in that country and have my US headquarters own it. What I want is for ownership of the foreign subsidiary to directly mirror the primary company's, and the most efficient way to do it is to just have the US company own the foreign one.
If companies can't own companies, then instead I have to directly transfer ownership over the subsidiary to the shareholders of the primary company. That means they can sell their shares of the foreign subsidiary independently of the headquarters, and the two companies' ownership will diverge over time. I am effectively forced to IPO the foreign subsidiary at the moment of their creation.
You can't assign ownership to the current CEO or board members, because that creates a conflict of interest. They'd be able to take a US company they manage and turn it into a foreign subsidiary they own.
This would also make joint ventures, mergers, and acquisitions far more difficult and complicated, if not impossible.
If companies can't own companies, then instead I have to directly transfer ownership over the subsidiary to the shareholders of the primary company. That means they can sell their shares of the foreign subsidiary independently of the headquarters, and the two companies' ownership will diverge over time. I am effectively forced to IPO the foreign subsidiary at the moment of their creation.
You can't assign ownership to the current CEO or board members, because that creates a conflict of interest. They'd be able to take a US company they manage and turn it into a foreign subsidiary they own.
This would also make joint ventures, mergers, and acquisitions far more difficult and complicated, if not impossible.