How Do You Structure A Holding Company?

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:

  1. Profitability shares or dividends from companies its owns (including shares of stocks or bonds that pay dividends / interest);
  2. Providing services to owned companies; and.
  3. 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.