The term holding we have to establish that it is an Anglicism that has been formed from the sum of two lexical components:
-The English verb “hold”, which is synonymous with “keep” or “sustain” and comes from Germanic.
-The suffix “-ing”, which is used in English to indicate the action or what is the result of said action.
A holding company is a company that has majority control of the shares of a group of companies . The purpose of the commercial company in question, in fact, is the management of the property of other companies.
Typically, a holding company is formed by investors who buy shares of different entities with the aim of obtaining profits from each one. These capitalists have no interest in integrating the activities of the various firms, but only seek profitability .
In practice, a holding company is formed with a dominant company or company that controls other companies subordinate to it. In this way, the subordinate companies have their own legal personality, although they do not have decision-making power.
The company that has control is the holding company (also called simply holding company). Through majority ownership of the shares, it can exercise control over the subordinate ones.
It is important to keep in mind that a holding company is not a specific legal form. It is a structure and a management model: that is, an economic organization made up of different corporations.
Among the main benefits that the holding company has, we can highlight some such as the following:
-It is used on numerous occasions as a way to have to pay less taxes, since it allows you to enjoy certain tax benefits.
-No less significant is the fact that it is very useful to be able to put an end to all the inconveniences of business groups.
-Likewise, it strongly favors integration in order to achieve control over all phases of the life of a product in question.
-Of course, we must not overlook that the holding company gives the possibility of reaching more different sectors in a really simple way.
-Helps evolve a business or company in question.
-Transmits to the client an image of solidity and prestige.
On the contrary, among the disadvantages of the holding company we can highlight some such as that the corporate identity can disappear, that it can give rise to what is a true monopoly and can even bring with it a lack of communication and information between the different companies. of the group.
Many times the idea of holding is confused with other concepts. A cartel , for example, is an association of several companies in the same sector that limit their action to a specific region. In this way, the members of the cartel do not compete with each other and can regulate production and prices based on their agreement. A trust , meanwhile, is a monopoly that is created through the union of companies that control market prices. The holding company, unlike the cartel and the trust, does not focus on the product, but on capital.