However, there must be minimum of one Organization created before your can create any Company. In other words, even if your company does NOT have any subsidiaries, you will still need to create an Organization first, then only create your Company (click here for how to create an Organization and Company). 

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The advantage of having the two-level set up is that you can easily add on more Companies, or even Organization, whenever your company expend and grow. It also allows flexibility in terms of setting up your HR Policy. For example, you can create a Company, setup their HR Policy, also Copy the HR Policy for other Companies. Or you can create different Companies that have different HR Policy, depending on your company's operation module.