A holding company can be described as a parent enterprise, limited liability company, or limited partnership that possesses enough voting shares in another organization, that it can control that organization's policies as well as regulate its administration choices.
Albeit a holding company owns the assets of other organizations, it only keeps up oversight capacities and along these lines does not actively take part in running a business's day to day operations.
A holding company exists for the only reason of controlling other organizations, regardless of whether they be other corporations, limited partnerships or limited liability companies.
Holding companies may likewise possess property, for example, land, licenses, trademarks, shares, and different resources.
Organizations that are 100% possessed by a holding organization are alluded to as "wholly-owned subsidiaries."
Albeit a holding company can recruit and fire directors of organizations it possesses, those supervisors are at last answerable for their own activities.
It is in this manner important for proprietors to watch out for their organizations to ensure they are running ideally.
Holding companies enjoy the advantage of security from misfortunes.
In the event that a subsidiary organization goes bankrupt, the holding company may encounter a capital loss and a decrease in net worth.
Notwithstanding, the bankrupt organization's lenders cannot legally pursue the holding company for compensation.