A holding company is a company whose primary business is holding a controlling interest in the securities of other companies.[1] A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies to form a corporate group.
In many jurisdictions around the world, holding companies are usually called parent companies, which, besides holding stock in other companies, can conduct trade and other business activities themselves. Holding companies reduce risk for the shareholders, and can permit the ownership and control of a number of different companies. The New York Times also refers to the term parent holding company.[2]
Holding companies are also created to hold assets, such as intellectual property or trade secrets, that are protected from the operation company. That creates a smaller risk when it comes to litigation.
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