Holding company

Holding company

A holding company is a company that owns part, all, or a majority of other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself, rather its "only" purpose is owning shares of other companies. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies. In the U.S., 80% or more of voting stock must be owned before tax consolidation benefits such as tax-free dividends can be claimed.Fact|date=July 2008

Sometimes a company intended to be a pure holding company identifies itself as such by adding "Holdings" or "(Holdings)" to its name, as in Sears Holdings.

United States

In the United States, Berkshire Hathaway is one of the largest publicly-traded holding companies; it owns numerous insurance companies, manufacturing businesses, retailers, and other companies. Two other large notable holding companies are UAL Corporation and AMR Corporation, publicly traded holding companies whose primary purposes are to wholly own United Airlines and American Airlines, respectively.

Broadcasting

In U.S. broadcasting, many major media conglomerates have purchased smaller broadcasters outright, but have not changed the broadcast licenses to reflect this, resulting in stations that are (for example) still licensed to Jacor and Citicasters, effectively making them holding companies for their owner Clear Channel Communications. This is sometimes also done on a per-market basis; for example in Atlanta both WNNX and later WWWQ are licensed to "WNNX LiCo, Inc." (LiCo meaning "license company"), both owned by Susquehanna Radio (which was later sold to Cumulus Media). In determining caps to prevent excessive concentration of media ownership, all of these are attributed to the parent company, as are leased stations, as a matter of broadcast regulation.

Personal holding company

In the United States, a personal holding company is defined in section 542 of the Internal Revenue Code. A corporation is a personal holding company if both of the following requirements are met:

*Personal Holding Company Income Test. At least 60% of the corporation's adjusted ordinary gross income for the tax year is from dividends, interest, rent, and royalties.
*Stock Ownership Requirement. At any time during the last half of the tax year, more than 50% in value of the corporation's outstanding stock is owned, directly or indirectly, by five or fewer individuals.

Public utility holding company

Regarding the regulation of natural gas or electric utilities, a "Public Utility Holding Company" is a company which owns a subsidiary which distributes electricity or gas to retail customers. Such companies are subject to the Public Utility Holding Company Act of 2005.

Parent company

A parent company is a holding company that owns enough voting stock in another firm (subsidiary) to control management and operations by influencing or electing its board of directors. A parent company could simply be a company that wholly owns another company.

ee also

*Bank holding company
*Conglomerate (company)
*Investment company
*Patent holding company
*Shell corporation

References


Wikimedia Foundation. 2010.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • holding company — see company Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. holding company …   Law dictionary

  • holding company — holding companies N COUNT A holding company is a company that has enough shares in one or more other companies to be able to control the other companies. [BUSINESS] ...a Montreal based holding company with interests in telecommunications, gas and …   English dictionary

  • holding company — n. (Finance) A company that controls other independently incorporated companies by ownership of most or all of their stock, but does not directly control the daily operations of those companies. [PJC] …   The Collaborative International Dictionary of English

  • holding company — holding ,company noun count a company that owns the majority of the SHARES in another company …   Usage of the words and phrases in modern English

  • Holding Company — Holding Company, auch Holder genannt, eine in den Vereinigten Staaten von Amerika ausgebildete eigenartige Form der Handelsgesellschaft, deren Zweck darin besteht, eine Interessengemeinschaft zwischen mehreren in Wettbewerb stehenden… …   Enzyklopädie des Eisenbahnwesens

  • holding company — holding .company n a company that completely or partly owns other companies, as well as doing business itself …   Dictionary of contemporary English

  • holding company — ☆ holding company n. a corporation organized to hold bonds or stocks of other corporations, which it usually controls …   English World dictionary

  • holding company — Finance. a company that controls other companies through stock ownership but that usually does not engage directly in their productive operations (distinguished from parent company). [1905 10] * * * Corporation that owns enough voting stock in… …   Universalium

  • holding company — A company that usually confines its activities to owning stock in, and supervising management of, other companies. A holding company usually owns a controlling interest in the companies whose stock it holds. In order for a corporation to gain the …   Black's law dictionary

  • holding company — A company that usually confines its activities to owning stock in, and supervising management of, other companies. A holding company usually owns a controlling interest in the companies whose stock it holds. In order for a corporation to gain the …   Black's law dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”