Before you visit andorralawyers official website to explore different types of holding companies, you must know what a holding company is. A holding company is such a company that happens to hold more than half of the equity share capital of some other companies, or it effectively controls the compositions of the board of directors of those other companies.
Types of the holding companies
Depending on its unique formation, characteristics, and other aspects, there are different holding companies. You need to explore and understand all types of holding companies out there.
Primary holding company
In this company arrangement, the primary holding company sits at the head of a combined organization of different companies and its subsidiaries. For instance, Alphabet Inc. is considered a primary holding company as it set up Google as its subsidiary. But Alphabet Inc. is not known to be the subsidiary of any other company. Hence, this is the primary holding company.
Pure Holding company
A pure holding company is a company that does not necessarily operate any plant but holds a controlling amount of shares of the other operating companies. In short, it is such a company that happens to hold the majority of stocks of another company. For instance, if company B is established for managing different subsidiaries of company A, then company A is the pure holding company here.
Finance Holding company
This one is unique among all types of holding companies. Such a company aims to earn profits by effectively financing operations of various other companies through promotion. But this is not to control the affairs of those other companies. Such a kind of company is to exercise control over finance.
A company or organization can be of different types. Each of these types is different from others. Once you know about all these, you will benefit.