For the band, see Big Brother and the Holding Company.

A holding company is a company or firm that owns other companies' outstanding stock. The
term usually refers to a company that does not produce goods or services itself; rather, its
purpose is to own shares of other companies to form a corporate group. Holding companies
allow the reduction of risk for the owners and can allow the ownership and control of a number
of different companies.
In the United States, 80% or more of stock, in voting and value, must be owned before tax
consolidation benefits such as tax-free dividends can be claimed.
[1]
That is, if Company A owns
80% or more of the stock of Company B, Company A will not pay taxes on dividends paid by
Company B to its stockholders, as the payment of dividends from B to A is essentially Company
A switching cash from one of its pockets to another. Any other shareholders of Company B will
pay the usual taxes on dividends, as they are legitimate and ordinary dividends to these
stockholders.
1 United States
o 1.1 Banking
o 1.2 Utilities
o 1.3 Broadcasting
o 1.4 Personal holding company
2 Parent company
3 See also
4 External links
5 Notes
United States
Banking
Further information: bank holding company
After the global financial crisis of 2008, many traditional U.S. investment banks converted to
holding companies. According to the Federal Financial Institutions Examination Council's
(FFIEC) website, JPMorgan Chase & Co.., Bank of America Corp., Citigroup Inc., Wells Fargo
& Co., and Goldman Sachs Groups, Inc. were the five largest bank holdings companies in the
finance sector, as of 31 December 2013, based on total assets.
[2]

Utilities
The Public Utility Holding Company Act of 1935 caused many energy companies to divest their
subsidiary businesses. Between 1938 and 1958 the number of holding companies declined from
216 to 18.
[3]
An energy law passed in 2005 removed the 1935 requirements, and has led to
mergers and holding company formation among power marketing and power brokering
companies.
[4]

Broadcasting
Further information: Media conglomerate
In US broadcasting, many major media conglomerates have purchased smaller broadcasters
outright, but have not changed the broadcast licenses to reflect this, resulting in stations that are
(for example) still licensed to Jacor and Citicasters, effectively making them such as subsidiary
companies of their owner Clear Channel Communications. This is sometimes done on a per-
market basis. For example in Atlanta both WNNX and later WWWQ are licensed to "WNNX
LiCo, Inc." (LiCo meaning "license company"), both owned by Susquehanna Radio (which was
later sold to Cumulus Media). In determining caps to prevent excessive concentration of media
ownership, all of these are attributed to the parent company, as are leased stations, as a matter of
broadcast regulation.
Personal holding company
In the United States, a personal holding company is defined in section 542 of the Internal
Revenue Code. A corporation is a personal holding company if both of the following
requirements are met:
[5]

Gross income test: At least 60% of the corporation's adjusted ordinary gross income is from
dividends, interest, rent, and royalties.
Stock ownership test: More than 50% in value of the corporation's outstanding stock is owned
by five or fewer individuals.
Parent company
Main article: Parent company
A parent company is a company that owns enough voting stock in another firm (subsidiary) to
control management and operations by influencing or electing its board of directors. A parent
company could simply be a company that wholly owns another company. This would be known
as a "wholly owned subsidiary".
See also
See also
Bank holding company
Conglomerate
Dubai World
Investment company
Airline holding companies
List of holding companies
Patent holding company
Public Utility Holding Company Act of 1935
Samuel Insull
Shell corporation
Social Holding Company