Holding company

From Academic Kids

A holding company is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors.

Strictly speaking, the term "holding company" might be used to describe any company that owns a majority of shares in another company. Usually, though, the term signifies a company which does not produce goods or services itself, but, rather, whose only purpose is owning shares of other companies (or owning other companies outright). Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies.

Berkshire Hathaway is one of the largest publicly traded holding companies; it owns numerous insurance companies, manufacturing businesses, retailers, and other companies. Another large holding company of note is UAL Corporation, a publicly traded holding company whose only purpose is to wholly own United Airlines.

Sometimes a company intended to be a pure holding company identifies itself as such by adding "Holdings" or "(Holdings)" to its name. This was spoofed by Terry Pratchett and Neil Gaiman in their book Good Omens with the fictional company Holdings (Holdings) Incorporated.

See also

nl:Holding ja:持株会社 pl:Holding

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