holding company

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Holding company

A corporation that owns enough voting stock in another firm to control management and operations by influencing or electing its Board of Directors.

Holding Company

A company that owns enough stock in another company to control its operations. That is, the holding company can appoint the board of directors, set policies, and generally operate as the sole owner of another company, even if it does not actually own 100% of the stock. Some holding companies do not have operations of their own; that is, they exist simply to own and control other companies. In the United States, if a holding company owns at least 80% of the stock in another company, dividends paid to that holding company are not taxed. See also: Double Taxation.

holding company

A type of parent company that exists primarily to exercise control over other firms. The control is exercised through ownership of a majority of the controlled firm's shares. Earnings of the holding company are derived from earnings of the controlled firms, which pay dividends on the shares. Compare subsidiary. See also operating unit.

Holding company.

By acquiring enough voting stock in another company, a holding company, also called a parent company, can exert control over the way the target company is run without actually owning it outright.

The advantages of this approach, provided that the holding company owns at least 80% of the voting shares, are that it receives tax-free dividends if the subsidiary prospers and can write off some of the operating losses if the subsidiary falters.

Because of its shareholder status, however, the holding company is insulated to some extent from the target company's liabilities.

holding company

a JOINT-STOCK COMPANY that controls another company or companies. Ownership may be complete (100%) or partial (ownership of 50%+ of the voting shares in the company). Such ownership confers powers to control the policies of SUBSIDIARY COMPANIES.The holding company will report the accounting results of these subsidiary companies as part of the accounting results for the group of companies. In addition, the holding company may own between 20% and 50% of the voting shares of an ASSOCIATED COMPANY, which will continue to produce its own annual accounts and retain a degree of independence, though subject to the influence of the holding company.

Holding companies are most frequently used as a means of achieving diversified or conglomerate growth, with the firm operating separate companies in different lines of production activity, but with each company subject to varying degrees of centralized control by the parent company. See CONSOLIDATED ACCOUNTS, HFORM. DIVERSIFICATION.

holding company

a company that controls another company or companies. Ownership may be complete (100%) or partial (ownership of 51%+ of the voting shares in the company). Such ownership confers powers to control the policies of subsidiary companies. The holding company will report the accounting results of these subsidiary companies as part of the accounting results for the group of companies.

Holding companies are most frequently used as a means of achieving diversified or conglomerate growth, with the firm operating separate companies in different lines of production activity but with each company subject to varying degrees of centralized control by the ‘parent company’. See DIVERSIFICATION.

holding company

A company that owns or controls another company.
References in periodicals archive ?
Language was inserted in the early versions of the correcting legislation expanding the IRA-related provisions to depository holding companies by amending Secs.
private investment firm The Blackstone Group, said that some state legislatures view mutual holding companies as conversions that allow many benefits of demutualizing except they don't deliver value to policyholders.
The guidance is expanded and also includes a general discussion of the November 2001 changes to the risk-based capital rule for bank holding companies in Regulation Y.
The challenge for the SEC is to find a way to supervise the international securities activities of the financial holding companies.
In addition, the GLB Act permits financial holding companies to engage in other activities that the Board determines, in consultation with the Secretary of the Treasury, to be "financial in nature or incidental to a financial activity.
Part 225--Bank Holding Companies and Change in Bank Control (Regulation Y)
10) Subpart J governs the conduct of merchant banking investment activities by financial holding companies as permitted under section 4(k)(4)(H) of the Bank Holding Company Act (12 U.
5 billion and Total Subsidiary Distributions to Parent and Qualified Holding Companies of $1,065 million (which is comprised of projected subsidiary distributions to parent of $965 million and subsidiary distributions to qualified holding companies of $100 million).
The Federal Reserve Board on August 15, 2000, issued guidance outlining the purpose and scope of its supervision of financial holding companies authorized to engage in a diversified range of financial activities.
Specifically, the ratings reflect the financial profile of the group's operating entities; the diversity of their earnings; their funds flow and capital needs; their strategic business ambitions; and the effect of Taiwan's evolving regulatory environment on financial holding companies.
I appreciate the opportunity to explain the rules recently proposed by the Federal Reserve Board and the Department of the Treasury to allow financial holding companies to engage in merchant banking activities under the Gramm-Leach-Bliley (GLB) Act.