Advantages Of A Holding Company

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A holding company is a parent company that owns sufficient voting shares in a company to control its management, governing policies. A holding company buys or otherwise obtains a majority percentage of stock in a company, which becomes and known as subsidiary company. Sometimes a pure holding company distinguishes itself by adding "Holding" or "Holdings" to its name.
As per company law, a company which is controlled by another company is called as a subsidiary company and the company which is controlling another company is called as a holding company. The control can be via control of management or via ownership of shares.


A subsidiary company is a company in which 50% or more voting shares is controlled
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The terms holding and subsidiary are used to express the managerial, financial, legal and principal relationships between special types of business organization, which includes financial institutions and corporations. A holding company means a body which is incorporated to acquire and grip the majority of shares of other companies; a subsidiary is a business whose mass of the shares is owned by a holding company.
The differences between a holding company and subsidiary company are as under:
1) On the basis of Ownership
Holding company buys the bulk of the shares in another company, which becomes as its subsidiary. A holding company must control more than 50% of company’s stock before it’s considered a subsidiary. Holding companies may in addition hold other holding companies- in this case they are known as top holding companies. The holding company has all privileges and farm duties of ownership for its subsidiaries. The subsidiaries are not autonomously owned; often continue to function as individual entities, though key corporate decisions are made by holding
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