Holding company Definition

GLOSSARY

/ˈhəʊldɪŋ/ /ˈkʌmp(ə)ni/

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What does Holding company mean?

Defined in section 1159 of the Companies Act 2006 as a company holding a majority of the voting rights in another subsidiary company or having the right to appoint or remove a majority of the subsidiary company’s board of directors.

In practice a holding company is often established as a non-trading entity, holding assets such as shares, real estate and intellectual property rights and overseeing a group structure in order to attract various tax, corporate accounting and risk management advantages.

Note also the broader definition of ‘parent undertaking’ in CA 2006, s 1162 (and Schedule 7) which includes a power to exercise, or actually exercise, dominant influence or control over a ‘subsidiary undertaking’.

Corporate

In practice a holding company is often established as a non-trading entity, holding assets such as shares, real estate and intellectual property rights

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