A holding company is also sometimes called an “umbrella” or parent company. A holding company is a type of financial organization that owns a controlling interest in other companies, which are called subsidiaries. The parent corporation can control the subsidiary’s policies and oversee management decisions but doesn’t run day-to-day operations.
What are the different types of holding companies?
There are four basic types of holding companies: A pure holding company exists only to own stock in other companies. A mixed holding company controls other firms and conducts daily business operations. Often, these companies are described as conglomerates. An immediate holding company is owned or controlled by another holding company.
How are holding companies regulated?
Holding companies are regulated by various laws, including the Securities Exchange Act of 1934 and the Investment Company Act of 1940. One of the most well-known legal cases involving a holding company is United States v.
