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A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. [1] A holding company usually does not produce goods or services itself. Its purpose is to own stock of other companies to form a corporate group .
holding company; subsidiary company; sole proprietorship; charitable incorporated organisation (UK) reciprocal inter-insurance exchange; However, the regulations governing particular types of entities, even those described as roughly equivalent, differ from jurisdiction to jurisdiction.
A subsidiary, subsidiary company, or daughter company [1] [2] [3] is a company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidiary company.
The holding company oversees its subsidiaries without offering products or services of its own. A bank holding company, in particular, has a controlling interest in one or more banks.
A corporate group is composed of companies. The general rule is that a company is a separate legal entity from its shareholders, that is the shareholder's liability for the subsidiary's debts is limited to the value of the shares, [4] and the shareholders cannot be required to perform the company's obligations.
A conglomerate usually has a parent company that owns and controls many subsidiaries, which are legally independent but financially and strategically dependent on the parent company. Conglomerates are often large and multinational corporations that have a global presence and a diversified portfolio of products and services.
If the parent is shown to have a long-standing and pervasive control over the affairs of the subsidiary, then there is a presumption that the parent was not acting in the best interests of the subsidiary. If the parent is unable to displace this presumption, then the parent is liable for all the obligations of the subsidiary. [4]
A conglomerate is a combination of multiple business entities operating in entirely different industries under one corporate group, usually involving a parent company and many subsidiaries. Conglomerates are typically large and multinational corporations that manage diverse business operations across various sectors.