Holding Company

Holding Company, company which controls one or more other companies, usually through majority holding of shares in them. The principal purpose of a holding company is not investment, but control of its subsidiaries. The holding company may be instituted to provide its member companies with marketing, managerial, or financial services, or may simply exist to amalgamate companies into larger blocks. A holding company usually provides a cheaper takeover method than outright purchase, and usually allows the subsidiary to keep its identity and goodwill intact. Holding companies may control aggregate capital far beyond their own intrinsic reserves, though this is subject to legislative control.