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.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

holding company

A company that owns or controls another company.

References in periodicals archive ?

* The board of directors and officers of the mutual holding company will remain the same.

Jewelers Mutual Board OKs Plan to Transition to Mutual Holding Company

As we explained above, both entities are legally different entities and based on this, Ithmmar Bank in Bahrain is not responsible for the liabilities of its holding company.

Subsidiary and parent firms are separate entities

Though there are examples of Temasek Holdings - Singapore's state holding company - and similar setups in Malaysia and China, but the problem is that political dynamics of Pakistan is very different from these Southeast Asian countries.

Sarmaya-e-Pakistan to fix the unfixable state-owned enterprises

Discounts are irrelevant if there are no reasons for the stock market to expect for the holding company to grow in the future.

Should you buy conglomerate stocks that offer discounts?

Existing shareholders of the Bank, other than the MHC, will receive shares of common stock of the new holding company pursuant to an exchange ratio based on their aggregate %age ownership interest and reflecting certain assets held by the MHC.

Mid-Southern Savings Bank, FSB to Conduct Second Step Conversion

The holding company structure provides an organization with the flexibility to choose when to merge or integrate an acquired bank with an existing subsidiary bank.

Are Bank Holding Company Structures Still Beneficial?

The Holding Company for Spinning and Weaving is still discussing how to restructure its debts with the national investment bank, according to Abdel Badie.

Cotton company asks EGAS to approve debt repayment schedule

The General Holding Company, the largest industrial complex in the UAE, will in cooperation with investors from the public sector establish private joint companies and industries with large capital to meet the requirements of the local, regional and global markets.

President amends law on general holding company

The new holding company, Suncorp Group Limited, would have three major lines of businesses - general insurance, banking and life insurance.

-Suncorp Metway to create holding company

Non-financial business operators (NFBOs) are allowed to own up to 9 percent of the voting shares of a bank holding company compared to the current 4 percent, as the Korean government has approved on July 28 the amendments to the Financial Holding Companies Act after the National Assembly passed them on July 22.