2007-02-04 17:11:07 · 3 answers · asked by gayathri k 1 in Business & Finance ➔ Corporations
Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies. ...
en.wikipedia.org/wiki/Holding_company try this
2007-02-04 17:51:35 · answer #1 · answered by suresh b 3 · 0⤊ 0⤋
It's an asset protection method used by rich people to prevent unscrupulous people from trying to profit from rich people by way of frivolous law suits.
An example would be, say you have a Trust called X. You want to invest in the stockmarket using Trust X funds. In order to do that and gain other benefits that companies gain, you'd set up a holding company that would trade for your Trust X in the stockmarket. The holding company would hold and trade Trust X funds.
This way Trust X would enjoy some of the benefits of the company that trades for it as well as some of the benefits that Trusts enjoy. I hope this helps. An experienced tax lawyer or accountant would be able to explain it in a better way; I'm sure you'll get better answers.
2007-02-05 01:26:39 · answer #2 · answered by Muga Wa Kabbz 5 · 0⤊ 0⤋
Go To www.wikipedia.org and type-in holdin company in it's search engine. You will get the definition of a holding company and example companies to research.
2007-02-05 04:18:40 · answer #3 · answered by Chris P 3 · 0⤊ 0⤋