The term holding company is a common one in the business world, but it may not be obvious to everyone what it means or what the point of one is. Here are three things you need to know about holding companies.
1. What Holding Companies Are
Holding companies are entities with a controlling interest in other companies’ securities. These companies may be created for a variety of reasons. First and foremost, it can be created to house a corporate group, where the holding company owns stock in each company within the group. For example, Stefan Soloviev created the holding company The Soloviev Group for this reason. Holding companies may also be formed to give an organization the opportunity to expand into new industries and markets via subsidiaries.