Holdings Company

A holding company is a business entity that owns and controls other companies, known as subsidiaries, but typically does not engage in the day-to-day operations of those businesses.

 

The primary function of a holding company is to manage its investments, control the subsidiaries, and provide centralized management. It can also offer financial, legal, or administrative services to its subsidiaries.

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Holding companies are often used to reduce risks, centralize management, and take advantage of tax or legal benefits. They can hold various types of assets, including stocks, bonds, real estate, or other businesses.

 

For example, a holding company may own several companies in different industries, thus diversifying its investments and limiting the exposure to any one particular market.