Holding Company

Holding Company – A Holding Company, also known as a Parent Company or Umbrella Company, is a business entity that owns a controlling interest in one or more subsidiary companies. Rather than engaging directly in the production of goods or services, its primary purpose is to control, manage, and oversee the operations and policies of its subsidiaries. The holding company may influence major decisions such as investment planning, mergers, acquisitions, and overall corporate strategy, while allowing each subsidiary to handle its own day-to-day operations. This structure helps in risk management, tax efficiency, and strategic diversification across different industries or markets.

Example: Tata Sons Ltd. acts as the holding company for the Tata Group, owning controlling stakes in subsidiaries such as Tata Motors, Tata Steel, and Tata Consultancy Services (TCS).