holding company (redirected from Parent companies)

Holding Company

A parent corporation that owns enough voting stock in another corporation to control its board of directors (and, therefore, controls its policies and management).

Notes:

A holding company must own at least 80% of voting stock to get tax consolidation benefits, such as tax-free dividends.

See also: Board of Directors, Dividend

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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.

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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.