Holding Company

A holding company is one whose function is to control another company or a number of other companies, rather that producing any goods or services itself. Many large corporations create many companies and structure them under a holding company, in order to protect each individual company from losses that another might make. Losses are confined to individual companies, and creditors cannot pursue other companies in the corporation, including the holding company, for debts that they are owed from one specific company in the group. Holding companies may also structure the companies that they control in different tax jurisdictions to benefit from low corporation tax rates.

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