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 ?
Since the first law allowing mutual holding companies came in 1995 in Iowa, about 28 other states in addition to the District of Columbia have followed suit and now have some type of mutual-holding-company legislation, either authorizing the creation of such companies or allowing businesses to retain their mutual heritage.
Although this policy statement, by its terms, applies only to federally insured depository institutions, the Federal Reserve believes the guidance it contains is broadly applicable to bank holding companies.
The GLB Act neither specifically authorizes nor specifically forbids financial holding companies or financial subsidiaries of national banks to engage in real estate brokerage and management activities.
The cash held at qualifying holding companies represents cash sent to subsidiaries of AES domiciled outside of the United States.
There should be minimal, if any, noticeable change in the well-established relationships between the Federal Reserve and the primary supervisors of depository institutions controlled by financial holding companies.
Before making our proposal, the staff reviewed existing research and the staffs of the two agencies jointly conducted interviews at several major securities firms and bank holding companies to gather information on how the merchant banking business is conducted.
The Federal Reserve Board and the Secretary of the Treasury anticipate issuing shortly an interim rule governing the merchant banking activities of financial holding companies.
Under current law and regulations bank holding companies may only engage in certain limited insurance activities.
10 means the transference of the subsidy to a wider range of financial businesses, producing distortions in the competitive balance between those latter units that receive a subsidy and identical units that do not--whether those units are subs of holding companies or totally independent of banking.
The number of registered utility holding companies has more than doubled in the past nine years, expanding from 14 to 30 since 1992, according to an APPA report documenting holding company changes.
The Board previously has determined that if an applicant's principal shareholder is associated with other one-bank holding companies, the proposed formation of a one-bank holding company is analyzed by the Board using the same standard that would be used for a multibank holding company acquisition.
His experience in the financial industry includes the position of Vice President of Information Technology for two multi-million dollar banks in California, and Information Technology consulting services for eight banks, mortgage, and holding companies.