QS Study

A holding company is an organization which is formed to acquire the continuing amount of shares or stocks of other companies and thereby to controls their poesies and operations. It holds dynasty on through a nominee a majority of the voting shares of the subsidiary company on taking the power to appoint the majority of the members of the board of the directors. Different writers define holding womanly differently these are –

M.C. Sheila: Holding womanly is a form of business organization which is created for the purpose of combining other companies by owning a continuing amount of their stock.

Gorges and Baker: A holding company is organized for the sour purpose of buying enough of voting stock in other companies called subsidies rue to ensure.

Oxford Dictionary of Business: A company is a group of companies that hold shines in other companies is holding company.

From this definition, we can say that-

  • Holding company bought 51% share of the subsidiary company.
  • It can control the management of the subsidiary company.
  • But the subsidiary company has the separate entity.
  • Only Joint Stock Company can be holding company.

So the company holding shares on the stock of a company or companies is known as holding company and the company whose shares and held by a holding company is known as the subsidiary company.