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Meaning Of Holding Company

What is a holding company...


Meaning of Holding Company


What Is A Holding Company?

A holding company is a parent company, limited liability company, or limited partnership that owns a significant number of voting shares in another company. 

The shareholding is structured in such a way that the holding company has control over the policies of its subsidiary company as well as oversight over management decisions.

Although a holding company owns the assets of other companies, it only retains management capacities and is thus not directly involved in the day-to-day operations of a corporation.

According to Indian company law, a company that is owned and controlled by another company is referred to as a subsidiary, while the former is referred to as a holding company. 

As a result, the term "control" is defined in company law to assess a company's eligibility to be referred to as a holding company. Control can be exercised by management or by share ownership.

 

Laws Governing The Formation Of A Holding Company:

It is important to remember that the laws governing the formation of a holding company vary from country to country. As a result, the legal definition of this type of company varies slightly around the world. 

Most countries, for example, require a holding company to control at least 50% of the voting shares in order to be legally recognized. Some jurisdictions, however, require a higher percentage of voting shares. See also: parent company, sister company, and subsidiary.

 

 

 

 

Post Title: Meaning Of Holding Company

 

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