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What are the types of holding companies?

What are the types of holding companies?

A holding company is known to be such an organization that is formed to acquire continuing stocks or shares of other companies to control their operations. Such an organization exists to acquire the controlling amount of shares of the stocks of other companies to control their operations and policies. 

There are several types of holding companies that you must know about. Each of the distinct types has unique characteristics. A few of these types are given below.

Parent holding company

In this arrangement, an existing company organizes subsidiary companies and holds some controlling amount of shares. For example, if Tata Tea acquires a controlling stake in Tetley, then Tata Tea will be the parent holding company here.

Mixed Holding company

A mixed holding company operates one plant (at least) along with shares of subsidiary companies. Such a holding company runs its own business while it controls subsidiaries’ business.

Consolidated holding company

It is one of the most significant types of holding companies out there. This holding company is generally formed by the existing consolidated companies known as consolidated holding companies. In short, this type of company happens to be regarded as a subsidiary of another subsidiary company.

Proprietary holding company

As its name suggests, this kind of holding company happens to hold entire stocks issued by the subsidiaries. It is as good as becoming a proprietor of the company. There are many companies of these types.

Offspring

In this holding company arrangement, a brand new company is known to be formed for taking over the share of an already existing company. It has its characteristics and features.

Conclusion

You should visit a good website to know about different companies. Information regarding the formation of such companies is also given there. You will be extremely helpful after going through such information and details. Different types of companies have different benefits and features. 

Mark Campus

Mark Campus is a content marketer who owns Keenan’s room. A writer by day and a reader by night, he is loath to discuss himself in third person.