What is Holdco?

Holdco, contraction of the holding company, is a company created to owe a control share in another company. The control share allows him to make changes to the board and control the voices held by shareholders; In some cases, Holdco holds all the share in another company, in which case the company is considered a completely owned subsidiary Holdco. Holding companies are established to reduce the risks for companies owners and some can control a large portfolio of companies as investment strategies. In some regions, as in the United States, if HoldCO controls more than 80% of voting shares, this income is without tax, which is an advantage considered in deciding how many shares the company should buy. When the company receives a loss, it is a depreciation of tax. Holdcos can also sell shares in itself and create capital they can use to buy Stock in multiple companies.

For owners of companies, the establishment of HoldCO can distribute the risks associated with ownership. There may also be tax advantages and other potential accounting benefits depending on how the company is set up and administration. Company accountants and lawyers help with the process of developing and creating the company and determining how many shares they should hold. In the case of Holdco involved in the purchase of shares in more companies, the Board of Directors will decide on which company to invest and how to invest strongly.

Many Holdcos have the word "possession" or "possession" in his names to clarify their purpose. Shares of such companies, if available for sale, can be more expensive than shares in ordinary companies. For example, Berkshire Hathaway, a holding company based in the United States with a very diverse portfolio -Empire shares. Investors in such companies may include institutions and very rich individual investors.

When Holdc isIt must publish information about its operations and finances. This information can be found in the publication of shareholders and other publications. If these companies are kept privately, they can maintain the confidentiality of their operations because they are not regulated by agencies involved in investment monitoring and related financial activities. This can also provide certain benefits to people who establish such companies because they may want to maintain privacy in their financial activities.