diff --git a/erpnext/setup/doctype/company/company.py b/erpnext/setup/doctype/company/company.py
index 33361e81d46..ad9d64baf53 100644
--- a/erpnext/setup/doctype/company/company.py
+++ b/erpnext/setup/doctype/company/company.py
@@ -39,6 +39,7 @@ class Company(NestedSet):
 		self.validate_coa_input()
 		self.validate_perpetual_inventory()
 		self.check_country_change()
+		self.set_chart_of_accounts()
 
 	def validate_abbr(self):
 		if not self.abbr:
@@ -174,6 +175,12 @@ class Company(NestedSet):
 			self.country != frappe.get_cached_value('Company',  self.name,  'country'):
 			frappe.flags.country_change = True
 
+	def set_chart_of_accounts(self):
+		''' If parent company is set, chart of accounts will be based on that company '''
+		if self.parent_company:
+			self.create_chart_of_accounts_based_on = "Existing Company"
+			self.existing_company = self.parent_company
+
 	def set_default_accounts(self):
 		self._set_default_account("default_cash_account", "Cash")
 		self._set_default_account("default_bank_account", "Bank")