# Sole Parent > Sole Parent means a parent entity owning 100% of an organization's capital stock directly or indirectly. **Term:** Sole Parent **Last updated:** 2026-07-29 ## Definition ## What Sole Parent Means in a Contract Sole Parent is a defined term used to identify the single upstream entity that owns the entirety of a subsidiary's outstanding capital stock, membership interests, or equivalent equity. Unlike a majority shareholder who shares ownership with others, a Sole Parent holds complete control because no minority interests exist. This distinction matters in contracts because many provisions, such as guarantee obligations, consolidated reporting duties, or waiver rights, are drafted differently depending on whether full ownership exists. When a contract references a Sole Parent, it typically does so to simplify governance assumptions. For instance, a wholly owned subsidiary does not need to seek approval from outside shareholders before entering certain transactions, because the Sole Parent's consent is sufficient. This can streamline negotiations and reduce the number of parties whose sign-off is required for amendments, waivers, or corporate restructurings. ## How Sole Parent Is Defined or Measured Ownership percentage is the primary measure used to determine Sole Parent status. The standard threshold is 100% of the capital stock or equity, whether held directly or through a chain of intermediate holding companies. Contracts often specify that ownership can be indirect, meaning the Sole Parent may control the subsidiary through one or more wholly owned intermediaries, so long as the ultimate beneficial ownership traces back entirely to the Sole Parent. Some agreements also require that voting rights and economic rights both rest with the Sole Parent, not just nominal share ownership. This prevents structures where voting control is separated from economic interest, which could undermine the purpose of the defined term. Drafters may reference supporting documents, such as the subsidiary's