A holding more than a company, it is a kind of arrangement that brings together several companies, professionals or shareholders. This organization facilitates the management of these companies and is accompanied by many non-negligible advantages. What is a holding? What are the interests of this structure? Why choose this organization? Explanations.
A holding company is a company whose purpose is to bring together partners and/or shareholders. The objective of this organization is to have more influence and sometimes even more power in the companies that make up the holding company. Depending on the objectives set, a management unit can be decided.
There are two types of holding:
The creation of a holding company therefore allows shareholders to have more power. Moreover, a holding company is commonly referred to as a parent company. It can be national or international. The companies that make up the holding company are called daughter companies.
Through the holding, the parent company can:
The shareholders invest in the holding company but without putting themselves in danger because their person and their assets are not involved.
By creating a holding company, shareholders are able to enjoy significant control with a minimum of investment. Indeed, it is sufficient to own 50% of the shares, plus one share, to control a daughter company. When a holding company holds more than 50% of the shares, then the CEO of the holding company (parent company) is the hierarchical superior of the various CEOs of the subsidiaries (daughter company). The holding company has significant influence in the decision-making of its subsidiaries. The latter have more means to develop but less freedom.
The holding company makes it possible to centralize the control and management of several companies and whether the activities are similar or not. For example, parent companies can centralize accounting management or have only one legal advisor.
The creation of a holding company is very similar to that of a company of another type. The holding company has no specific legal form. Its management therefore depends on the status of the various subsidiaries. Here are the legal forms.
To create a holding company, it is possible for a natural or legal person to contribute securities to one of the subsidiaries. Then, the holding acquires other titles and takes part in several subsidiaries in order to develop. Finally, a holding company can also participate in the creation of new companies, such as operating companies. Thus it optimizes their operation while keeping control of the various activities.
Creating a holding company is not easy. This is why professionals and shareholders embarking on this adventure do not hesitate to seek help. They then benefit from a legal, financial and tax optimization of the operation.
The main interest of a holding company is to offer a pooling of services. Companies can also take advantage of the infrastructures of the various subsidiaries. Depending on the activity carried out by the various daughter companies, it is also possible to pool orders with suppliers or service providers and reduce costs.
All you need to do is hold a stake of at least 5% in another company for at least two years to adopt a parent-daughter regime. This is advantageous because it avoids double taxation. The taxable profits taxed with the companies that generated this turnover. Dividends are taxed with the holding company. If the holding company opts for tax consolidation, the payment of income tax is globalized. Profits and losses are pooled which can reduce the amount of tax.
