A holding, or holding company, is a specific type of business organization where one parent company (the holding) owns and manages equity stakes in other, subsidiary companies. The parent company itself usually does not conduct any significant operational activities (such as manufacturing or sales); its main purpose is the strategic and financial management of the entire group. By owning a controlling interest (typically over 50%) in its subsidiaries, it can influence their decisions and direction.
The main advantages of a holding structure are diversification and risk management. If one subsidiary encounters financial difficulties, its problems do not threaten the other companies in the group or the parent company, thanks to legal separation. Other reasons for creating a holding include tax optimization, centralization of management functions (e.g., finance, marketing), easier asset management, and more efficient capital allocation within the group. The individual subsidiary companies remain separate legal entities throughout this structure.
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