holding company

(redirected from Parent companies)
Also found in: Dictionary, Thesaurus, Legal, Financial.
Related to Parent companies: Parent corporation

holding company:

see corporationcorporation,
in law, organization enjoying legal personality for the purpose of carrying on certain activities. Most corporations are businesses for profit; they are usually organized by three or more subscribers who raise capital for the corporate activities by selling shares
..... Click the link for more information.
The Columbia Electronic Encyclopedia™ Copyright © 2013, Columbia University Press. Licensed from Columbia University Press. All rights reserved. www.cc.columbia.edu/cu/cup/
The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Holding Company


a company that owns a controlling portion of the stock of other companies for the purpose of controlling and managing their operations.

There are two types of holding company: the pure holding company, which confines its functions to the holding of interests in other companies, and the mixed holding company, which in addition carries on its own operations in such areas as industry, trade, transportation, and finance. The holding company is an integral part of the holding system. Holding companies head trusts and large concerns in all capitalist countries; some monopolies, primarily multinational monopolies, are headed by a system of holding companies. The British and Dutch petroleum monopoly Royal Dutch-Shell, for example, is controlled by two holding companies: the British firm Shell Transport and Trading and the Dutch firm Royal Dutch Petroleum. These two corporations own shares in two other holding companies: Shell UK, Ltd., in Great Britain and Shell Petroleum N. V. in the Netherlands, which together own or hold shares in more than 500 companies, either directly or through their subsidiaries. Unilever, a British and Dutch trust that manufactures food products, soap, and perfume, has a similar complex structure.

Holding companies, which may simultaneously comprise such firms as industrial concerns, commercial banks, and insurance companies, represent one of the organizational forms of the financial oligarchy. An example of such an organizational structure is provided by two banks of the Federal Republic of Germany—Deutsche Bank and Dresdner Bank—and the Belgian bank Société Générale de Belgique, which head financial groups of the same names. On the average, each of these banks owns shares in and controls the operations of 150 companies, including finance, investment, insurance, commercial, industrial, and transportation companies and companies in the service sector.

Trusts and large concerns make extensive use of holding companies in their internal organizational structure; by this means they control and direct groups of subsidiaries, which are classified by a distinguishing feature, such as location, economic sector, or commercial activity. For example, Exxon, the largest petroleum monopoly in the capitalist world, includes approximately ten holding companies, which head subsidiaries operating in such areas as Africa and the Middle East. Monopolies often create such holding companies in countries with low tax rates in an effort to maximize profits.

The development of holding companies marks an intensification in the concentration of production and capital, since it fosters the subordination of small and medium-sized companies to large corporations.


The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
References in periodicals archive ?
parent companies were by parent companies in manufacturing, and another 40 percent were by those in information (table 3).
The guidelines thus call for the authorities to place restrictions on the extension of loans from those banking subsidiaries to their parent companies.
Nonetheless, the decision should result in fewer cases in which parent companies are held liable under CERCLA for the actions of their subsidiaries.
In addition, complete interviews were conducted at four US parent companies and four Chinese parent companies.
These proposals include the harmonization of the bases on which taxable profits are computed, the permissibility of parent companies to set off losses incurred by their branches or other affiliates set up in other member states, and the elimination of withholding tax at source on interest and royalties paid by a subsidiary in one member state to its parent in another (on lines similar to the dividend proposal referred to above).
parent companies, their foreign affiliates, and U.S.
parent companies that have a qualifying presence in a unitary tax state.
Historically, in these situations, foreign parent companies used related-party debt to fund their U.S.
The court confirmed, on 14 July, that the imputability of the unlawful conduct of their subsidiary to the two parent companies applied even in the case where the parent company holds virtually all the capital in the subsidiary.
parent companies decreased 5.3 percent to 21.1 million workers, which mirrored the percent change in total private-industry employment in the United States.
Section 163(j), in force since July 10, 1989, says affected companies are not allowed to deduct interest expenses paid to their foreign parent companies. Affected companies have (1) "excess interest expense" (net interest expense over 50% of cash flow) and (2) a debt-to-equity ratio of greater than 1.5 to 1.
Ruling in two cartel cases, on 13 September(1), the EU Court of Justice handed down a judgement that will force the European Commission to review the rules applying to joint and several liability of successive parent companies for the payment of a fine imposed on their subsidiary.