A Holding Company is a type of company that primarily exists to own shares of other companies. Its main purpose is to control or manage subsidiary companies. Key aspects include:
Ownership and Control: A Holding Company typically owns a significant percentage of shares in one or more subsidiary companies, giving it control over its operations and management.
Limited Operations: Unlike other companies, a Holding Company may not engage in its business operations but instead focuses on managing its investments in subsidiaries.
Risk Management: By creating separate subsidiaries for different business activities, a Holding Company can limit financial and legal risks to individual entities.
Legal Structure: Holding Companies are often structured to optimize tax benefits and regulatory requirements.