A subsidiary that engages in business with other parties. That is, an operating unit has its own assets and liabilities and functions as if it were an independent company; the only difference is that it is owned by another company. An operating unit is useful for the profit it can produce. It contrasts with a nonoperating unit.
A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon Capital Cities/ABC became an operating unit of Disney. A decade earlier Capital Cities had acquired ABC. Compare nonoperating unit.