What is the structure of a holding company?
A holding company is a company that owns other companies’ outstanding stock.
A holding company usually does not produce goods or services itself; rather, its purpose is to own shares of other companies to form a corporate group.
What are the benefits of a holding company?
The advantages of holding companies
- What is a holding company and where does it fit? A holding company is a corporation that owns shares in another company.
- Defer and save tax.
- Qualify for capital gains tax exemption.
- Split your income to minimize tax.
- Protect your assets from creditors.
- Get help from a business advisor.
How does a holding company make money?
First, the basics — holding companies make money in one of three ways:
- Profitability shares or dividends from companies its owns (including shares of stocks or bonds that pay dividends / interest);
- Providing services to owned companies; and.
- Buying and selling assets (for example, buying and selling stocks).
Why would you set up a holding company?
A holding company is set up for the purpose of owning assets, shares in other companies and/or to manage or supervise other companies. It is sometimes referred to as a ‘parent’ company.