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 ?
There is also the risk that management of holding companies may use its capital to support failing businesses, which could have been used to expand its stronger investments.
Some holding companies continue to benefit from engaging in activities or investments that are not permissible at the bank level, including securities underwriting activities, insurance underwriting activities and merchant banking.
The results are based on data from 7,307 commercial banks, FDIC-supervised savings banks and savings associations, and 1,074 large top-tier bank holding companies and thrift holding companies as of March 30 of this year.
A second approach that states have used to challenge the use of trademark holding companies is to invoke the judicial doctrines of economic substance and business purpose as a means of disallowing deductions for royalty payments made by an operating company to a related trade-mark holding company.
Alaina Gimbert, assistant legal counsel, and Chan White, Supervision and Regulation Financial Holding Companies (FHS) in the Sixth District FHC's with more than 44% $300 million in assets FHC's with less than 50% $300 million in assets Information current as of March 31, 2004 Source: Federal Reserve National Information Center database Note: Table made from pie chart.
The Fed will be the "umbrella supervisor" of the financial holding companies that are the big dogs.
Given the lessons of the General Assembly's failure to enact statewide branch banking legislation a decade ago, Indiana should tread warily when it comes to blocking mutual holding companies, Williams says.
This article investigates the relationship between asset size and risk at bank holding companies from 1987 to 1993.(1) We find that for most of this period, the level of risk at large bank holding companies did not differ significantly from that at small bank holding companies.
Will Congress override states' rights and say interstate bank holding companies will operate under a separate, federally supervised set of rules?
The merger of the two mutual insurance holding companies is intended to make the combined entity a premier life, accident and health insurance provider in the Americas, with presence in the United States and 22 other jurisdictions throughout Latin America and the Caribbean.
The number of holding companies in Korea has steadily increased in recent years, signaling growing efforts by local businesses to streamline corporate governance structures, the Fair Trade Commission (FTC) said on October 3.
The Manual comprises the Federal Reserve System's regulatory, supervisory, and inspection guidance for bank holding companies (BHCs).