holding company



Type of business organization that allows a firm (called parent) and its directors to control or influence other firms (called subsidiaries). This arrangement makes venturing outside one's core industry possible and, under certain conditions, to benefit from tax consolidation, sharing of operating losses, and ease of divestiture. The legal definition of a holding company varies with the legal system. Some require holding of a majority (80 percent) or the entire (100 percent) voting shares of the subsidiary whereas other require as little as five percent.

Use holding company in a sentence

  • Sometimes wealthy people do not like to have things in their name so they put businesses or property in a holding company.

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  • If you want to own a business but don't want it in your name you can use a holding company to keep things more anonymous.

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  • I was learning about business in school, so when I went to the Halloween store recently, I asked the manager if they had a holding company.

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