Holding Company in United States

Practical Information

Note: Some of this information was last updated in 1982

A corporation (in U.S. law) organized for the purpose of owning and holding the stock of one or more other corporations. The term is generally applied to a corporation that owns enough of the voting stock of another corporation to have working control over it. Companies that conduct a business of their own in addition to owning the controlling stock of another company are called holding operating companies. Companies that do not operate a business but merely direct the activities of their subsidiaries are called pure holding companies. The holding company is the parent and the companies whose controlling stock it owns are subsidiaries. See subsidiary corporation (in U.S. law). The assets of the holding company consist mainly of stocks of the subsidiaries and from these stocks the holding company derives its income. Holding companies may be vulnerable to prosecution under antitrust laws (in U.S. law) when used as a device to suppress competition or to create a monopoly.

(Revised by Ann De Vries)

What is Holding Company?

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