holding company


Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia, Wikipedia.
Related to holding company: Personal Holding Company

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 ?
Although the new legislation allows S depository holding companies to have IRA shareholders, the real benefit is for existing C holding companies with IRA shareholders, to have those IRAs transfer the holding company shares to their beneficiaries in conjunction with making an S election.
Restructuring into a mutual holding company is an easier and quicker process than demutualizing, said Gregg Dykstra, vice president of internal operations and general counsel for the National Association of Mutual Insurance Companies.
The examiner's responsibilities are discussed with regard to ensuring that a banking organization's management of country risks is appropriately addressed during the bank holding company inspection process.
Under the new law, an investment bank that does not own a commercial bank (no deposits) can form a slightly different kind of financial holding company for which the SEC holds the umbrella.
City Holding Company stock is publicly traded "over the counter" on the Nasdaq national market system under the symbol CHCO.
Under a mutual holding company structure, Pan-American Life will have additional means to raise capital and more organizational flexibility, creating opportunities for greater growth through acquisitions and further financial strengthening of the company.
Section 3(d) of the BHC Act allows the Board to approve an application by a bank holding company to acquire control of a bank located in a state other than the home state of such bank holding company if certain conditions are met.
85-197, the IRS ruled that an acquiring company satisfied the COBE requirement following a merger of a holding company into its wholly owned operating subsidiary, reasoning that the holding company's historic business was also the subsidiary's historic business.
It converted in July 1998 to a mutual holding company structure after 119 years as a mutual, but in August 2000 its board of directors authorized development of a plan of full demutualization.
Investors are cautioned that these forward-looking statements regarding Charys Holding Company, Inc.
A December 21, 2001, staff opinion is included regarding the provision in the Gramm-Leach-Bliley Act that generally prohibits a financial holding company (FHC) from routinely managing and operating a portfolio company, the shares of which are owned by the FHC under the act's merchant banking authority (12 U.
As previously noted, it is common for a holding company to retain a portion of the initial stock offering proceeds for its own use.