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 ?
In Letter Ruling 201341004 (the facts and steps have been simplified for purposes of this item), a wholly owned subsidiary (Subsidiary) of a parent corporation (Parent) established a grantor trust under Sec.
Failure to adhere to these could result in creditors being able to "pierce the corporate shield" and hold the parent corporation accountable for the debts of the subsidiary.
f) The subcontractor can issue an invoice to the parent corporation for the testing service, and not include GST under the zero-rated provision of subsection 4(a) of Part V of Schedule VI of the ETA.
12, 1990), the New York State Tax Appeals Tribunal determined that a corporation was involved in a unitary business with its parent, a holding company, when the parent corporation lent money to the subsidiary, was involved in obtaining outside financing for the subsidiary's business activities, had no employees of its own, and relied completely on the subsidiary's facilities and employees.
Example: Parent corporation A files a consolidated return with group ABCD, directly holding 100% of corporation B, which holds 100% of C and D.
In other words, die parent corporation must own at least 80% of the stock not owned by another member of the group.
AMEX: ANG), the parent corporation of ANM's advisor and holder of approximately 18 percent of ANM's Class A shares, has provided a partial guarantee with respect to ANM's dividend payments and the repayment of ANM's outstanding loans.
The court stated that a parent corporation using a subsidiary for transaction of the parent's business (as distinct from the subsidiary's business) may be held liable for the acts of the subsidiary under general agency principles.
2268 (1994), held worldwide combined reporting to be constitutional as applied to unitary groups whether the parent corporation was domestic or foreign.
Arctic Slope Regional Corporation, ASRC Federal's parent corporation, is owned by more than 9,500 Inupiat Eskimos primarily located along Alaska's North Slope.
1504(a) as one or more chains of includible corporations connected through stock ownership to a common parent corporation that is also an includible corporation, provided certain stock ownership requirements are met.

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