A
holding company is a
company that owns enough voting
stock in another firm to control management and operations by influencing or electing its
board of directors.
Strictly speaking, the term "holding company" might be used to describe any company that owns a majority of shares in another company. Usually, though, the term signifies a company which does not produce goods or services itself, but, rather, whose
only purpose is owning shares of other companies (or owning other companies outright). Holding companies allow the reduction of
risk for the owners and can allow the ownership and control of a number of different companies.