Holding Company is a purely financial concerning organisation whose main function is to conduct no activity (no produce goods and services) other than owning shares in other companies, to manage other businesses and receive dividends from its subsidiaries. The Holding Company is mainly to gain control and not to operate by representation on the boards of directors of the subsidiaries that allows the ownership and controls their subsidiaries to reduce the business risk.
Reference Definition by Businessdictionary.com: A Holding Company is a 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.
Related Definitions in the Project: The Business Organisation
