Essay On Holding Company

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HOLDING COMPANY

A holding company is a parent company that owns sufficient number of voting shares in a company to control its management and governing policies. A holding company buys or otherwise obtains a majority percentage of stock in a company, the company whose shares are bought becomes and known as subsidiary company. Sometimes a pure holding company distinguishes itself by adding "Holding" or "Holdings" to its name.
As per company law, a company which is controlled and managed by another company is called as a subsidiary company and the company which is controlling and directing another company is called as a holding company. The control can be via control of management or via ownership of shares.

SUBSIDIARY COMPANY

A subsidiary …show more content…

A holding company means a body which is incorporated or formed to acquire and grip the majority of shares of other companies; a company whose majority of the shares is owned and controlled by a holding company is called as a subsidiary …show more content…

A holding company must control more than 50% of company’s stock before it is considered as a subsidiary. Holding companies may, in addition, hold other holding companies- in this case, they are known as top holding companies. The holding company has all privileges and farm duties of ownership for its subsidiaries. The subsidiaries continue to function as individual entities because of the separate legal entity, though key corporate decisions are made by holding company.
2) On the basis of Management
Holding company governs the management policies and operations of the subsidiaries by its own and maintains the right to add or remove board members, directors, and other key managerial personnel. A Holding company may have strict grip on controlling the management or may permit subsidiaries to midlevel hiring and certain budgeting

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