Say Company A purchased 100% of Company B, and in 2012 Company turned over a net income of $X
Were Company B to be its own owner, the $X would go in their "pockets", their bank account.
But seeing as B is owned by A, does the latter have full ownership of the $X? Can they claim the whole sum of that income, and if so, what profit does B have left to invest in new ventures?
In realistic terms, BRK purchases 100% of GEICO. In 2014, GEICO – hypothetically speaking – turns over $4 billion in profits
Can BRK then collect that $4 billion, and if so what benefit is that to GEICO; for all their profits to be handed over to BRK; what can they (GEICO) then do for investing since their profits have been handed over, how do they grow? Would BRK offer them an 'allowance'?
What if they owned 10%, a minority holding? Would BRK still be entitled to collect 10% of annual net income?
NB: this is purely based on the subsidiary being a Private company, not going into the question of shares, dividends etc..