Holding company
A
holding company or
parent company is a
company that owns enough voting
stock in another firm to control management and operations by influencing or electing its
board of directors.
Strictly speaking, the term "holding company" might be used to describe any company that owns a majority of shares in another company. Usually, though, the term signifies a company which does not produce goods or services itself, but, rather, whose
only purpose is owning shares of other companies (or owning other companies outright). Holding companies allow the reduction of
risk for the owners and can allow the ownership and control of a number of different companies.
Berkshire Hathaway is one of the largest publicly traded holding companies; it owns numerous insurance companies, manufacturing businesses, retailers, and other companies. Another large holding company of note is
UAL Corporation, a publicly traded holding company whose primary purpose is to wholly own
United Airlines.
Sometimes a company intended to be a pure holding company identifies itself as such by adding "Holdings" or "(Holdings)" to its name. This was spoofed by
Terry Pratchett and
Neil Gaiman in their book
Good Omens with the fictional company
Holdings (Holdings) Incorporated.
*
Bank holding company*
Conglomerate (company)*
Shell corporation*
Patent holding company
