Advantages Of A Holding Company

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HOLDING COMPANY

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.

SUBSIDIARY COMPANY

A subsidiary company is a company in which 50% or more voting shares is controlled
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DIFFERENCE BETWEEN A HOLDING COMPANY AND SUBSIDIARY COMPANY

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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