Holding company

A holding company is a company that owns other companies' outstanding stock. A holding company usually 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% 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 transferring cash from one company to the other. Any other shareholders of Company B will pay the usual taxes on dividends, as they are legitimate and ordinary dividends to these shareholders.

Sometimes a company intended to be a pure holding company identifies itself as such by adding "Holding" or "Holdings" to its name.

United States

Banking

After the financial crisis of 2007–08, many 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 holding companies in the finance sector, as of 31 December 2013, based on total assets.[2]

Utilities

The Public Utility Holding Company Act of 1935 in the United States 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

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 iHeartMedia. 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

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, which is then known as a "wholly owned subsidiary".

When an existing company establishes a new company and keeps majority shares with itself, and invites other companies to buy minority shares, it is called a parent company.

See also

References

  1. ^ I.R.C. § 1504(a); I.R.C. § 243(a)(3).
  2. ^ "Holding Companies with Assets Greater Than $10 Billion". National Information Center. June 30, 2014. Retrieved 2014-11-28.
  3. ^ Hirsh, Richard. "Emergence of Electrical Utilities in America". Archived from the original on 2012-09-01.
  4. ^ "Public vs. Private Power : from FDR to Today". PBS.org. Retrieved 2014-11-28.
  5. ^ Cuiffo, Donna-Marie (1993-08-01). "Our Greatest Hits / The Personal Holding Company Trap: Federal Taxation". The CPA Journal. The New York State Society of CPAs. Retrieved 2017-12-06.

External links

Bank Holding Company Act

The Bank Holding Company Act of 1956 (12 U.S.C. § 1841, et seq.) is a United States Act of Congress that regulates the actions of bank holding companies.

The original law (subsequently amended), specified that the Federal Reserve Board of Governors must approve the establishment of a bank holding company and that bank holding companies headquartered in one state are banned from acquiring a bank in another state. The law was implemented,in part, to regulate and control banks that had formed bank holding companies to own both banking and non-banking businesses. The law generally prohibited a bank holding company from engaging in most non-banking activities or acquiring voting securities of certain companies that are not banks.

The interstate restrictions of the Bank Holding Company act were repealed by the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (IBBEA). The IBBEA allowed interstate mergers between "adequately capitalized and managed banks, subject to concentration limits, state laws and Community Reinvestment Act (CRA) evaluations."

Other restrictions, which prohibited bank holding companies from owning other financial institutions, were repealed in 1999 by Gramm-Leach-Bliley Act. In the United States, financial holding companies continue to be prohibited from owning non-financial corporations in contrast to Japan and continental Europe, where this arrangement is common.

Private equity firms, which solicit funds but are not classified as banks and, more importantly, are not backstopped by the Federal Deposit Insurance Corporation, may acquire large ownership positions in a number of non-bank corporations. That is not a problem since private equity firms are not banks.

Bank holding company

A bank holding company is a company that controls one or more banks, but does not necessarily engage in banking itself. The compound bancorp (banc/bank + corp[oration]) is often used to refer to these companies as well.

Big Brother and the Holding Company

Big Brother and the Holding Company is an American rock band that formed in San Francisco in 1965 as part of the same psychedelic music scene that produced the Grateful Dead, Quicksilver Messenger Service, and Jefferson Airplane. They are best known as the band that featured Janis Joplin as their lead singer. Their 1968 album Cheap Thrills is considered one of the masterpieces of the psychedelic sound of San Francisco; it reached number one on the Billboard charts, and was ranked number 338 in Rolling Stone's the 500 greatest albums of all time. The album is also included in the book 1001 Albums You Must Hear Before You Die.

Cheap Thrills (Big Brother and the Holding Company album)

Cheap Thrills is a studio album by American rock band Big Brother and the Holding Company. It was their last album with Janis Joplin as lead singer. For Cheap Thrills, the band and producer John Simon incorporated recordings of crowd noise to give the impression of a live album, for which it was subsequently mistaken by listeners. Only the final song, a cover of "Ball and Chain", had been recorded live (at The Fillmore in San Francisco).Cheap Thrills reached number one on the charts for eight nonconsecutive weeks in 1968.

Discovery Holding Company

Discovery Holding Company was an American company headquartered in Meridian, Colorado. The postal designation of nearby Englewood was commonly listed as the company's location in corporate filings and news accounts.

The company used to hold a 66-2/3% ownership stake in Discovery Communications, LLC, and operated Ascent Media and AccentHealth, LLC. On September 17, 2008, Discovery Holdings divested its interest in Ascent Media, and reorganized its remaining businesses around a new publicly traded holding company, Discovery Communications, Inc.

Janis Joplin

Janis Lyn Joplin (January 19, 1943 – October 4, 1970) was an American rock, soul, and blues singer-songwriter, and one of the most successful and widely known female rock stars of her era. After releasing three albums, she died of a heroin overdose at the age of 27. A fourth album, Pearl, was released in January 1971, just over three months after her death. It reached number one on the Billboard charts.

In 1967, Joplin rose to fame following an appearance at Monterey Pop Festival, where she was the lead singer of the then little-known San Francisco psychedelic rock band Big Brother and the Holding Company. After releasing two albums with the band, she left Big Brother to continue as a solo artist with her own backing groups, first the Kozmic Blues Band and then the Full Tilt Boogie Band. She appeared at the Woodstock festival and the Festival Express train tour. Five singles by Joplin reached the Billboard Hot 100, including a cover of the Kris Kristofferson song "Me and Bobby McGee", which reached number 1 in March 1971. Her most popular songs include her cover versions of "Piece of My Heart", "Cry Baby", "Down on Me", "Ball and Chain", and "Summertime"; and her original song "Mercedes Benz", her final recording.Joplin, a mezzo-soprano highly respected for her charismatic performing ability, was posthumously inducted into the Rock and Roll Hall of Fame in 1995. Audiences and critics alike referred to her stage presence as "electric". Rolling Stone ranked Joplin number 46 on its 2004 list of the 100 Greatest Artists of All Time and number 28 on its 2008 list of 100 Greatest Singers of All Time. She remains one of the top-selling musicians in the United States, with Recording Industry Association of America certifications of 15.5 million albums sold.

List of airline holding companies

This is a list of airline holding companies, that either own more than one airline or are the parent company of a single airline.

A company or firm in which the holding company owns a significant portion of voting shares, usually 20–50% or a "minority of share ownership", is known as an associate company. A company in which the holding company owns more than 50% voting shares or a "majority of share ownership" is known as a subsidiary. The holding company thus can also be referred to as the parent company at that stage.

To create the world's largest carrier, American Airlines and US Airways have merged on 9 December 2013, announced on 14 February 2013. The frequent flier programs is expected to be combined at a later date, and the airlines will codeshare in February 2014 using the American flight number. US Airways will exit the Star Alliance on 30 March 2014 and enter Oneworld alliance the day after, a single operating certificate would be delivered at the end of 2015.

Mutual organization

A mutual, mutual organization, or mutual society is an organization (which is often, but not always, a company or business) based on the principle of mutuality. Unlike a true cooperative, members usually do not contribute to the capital of the company by direct investment, but derive their right to profits and votes through their customer relationship. A mutual organization or society is often simply referred to as a mutual.

A mutual exists with the purpose of raising funds from its membership or customers (collectively called its members), which can then be used to provide common services to all members of the organization or society. A mutual is therefore owned by, and run for the benefit of, its members - it has no external shareholders to pay in the form of dividends, and as such does not usually seek to maximize and make large profits or capital gains. Mutuals exist for the members to benefit from the services they provide and often do not pay income tax.Profits made will usually be re-invested in the mutual for the benefit of the members, although some profit may also be necessary in the case of mutuals for internal financing to sustain or grow the organization, and to make sure it remains safe and secure.

Nalco Holding Company

Nalco Water, an Ecolab Company, is a Naperville, Illinois-based supplier of water, energy and air improvement solutions and services for industrial and institutional markets. The company sells various products and services designed to reduce energy, water and other natural resource consumption, enhance air quality, minimize environmental releases and improve productivity and end products.The company was founded in 1928 as the National Aluminate Corporation, formed from the merger of Chicago Chemical Company and the Aluminum Sales Corporation. By a series of mergers and acquisition, its name was changed to Nalco Chemical Company (1959 - 1999); then Ondeo Nalco Company (1999 - 2004); and in 2004 to Nalco Holding Company. It became a subsidiary of Ecolab Inc. in December 2011 after the completion of the US$5.4 billion acquisition by Ecolab.Nalco Water serves more than 70,000 customers employing over 11,500 employees operating in over 130 countries. Among its products is Corexit - an oil dispersant widely used in the Deepwater Horizon oil spill.

Penn Central Transportation Company

The Penn Central Transportation Company, commonly abbreviated to Penn Central, was an American Class I railroad headquartered in Philadelphia, Pennsylvania, that operated from 1968 until 1976. It was created by the 1968 merger of the Pennsylvania and New York Central railroads. The New York, New Haven & Hartford Railroad was added to the merger in 1969; by 1970, the company had filed for what was, at that time, the largest bankruptcy in U.S. history.

Piece of My Heart

"Piece of My Heart" is a romantic funk/soul love song written by Jerry Ragovoy and Bert Berns, originally recorded by Erma Franklin in 1967.

The song came to greater mainstream attention when Big Brother and the Holding Company (featuring Janis Joplin on lead vocals) covered the song in 1968 and had a much bigger hit with it. The song has since been remade by several singers, including Dusty Springfield on her 1968 album Dusty... Definitely, Bryan Ferry on his solo debut album These Foolish Things in 1973, Faith Hill in 1994 and Melissa Etheridge in 2005.

In 2004, the Big Brother and the Holding Company version was ranked number 353 on Rolling Stone's list of the 500 Greatest Songs of All Time. The song is also included among The Rock and Roll Hall of Fame's 500 Songs that Shaped Rock and Roll.

Regional Bell Operating Company

The Regional Bell Operating Companies (RBOC) are the result of United States v. AT&T, the U.S. Department of Justice antitrust suit against the former American Telephone & Telegraph Company (later known as AT&T Corp.). On January 8, 1982, AT&T Corp. settled the suit and agreed to divest its local exchange service operating companies. Effective January 1, 1984, AT&T Corp.'s local operations were split into seven independent Regional Bell Operating Companies known as Baby Bells.

RBOCs were originally known as Regional Holding Companies (RHCs). Currently, three companies have the RBOCs as predecessors: AT&T Inc., Verizon, and CenturyLink. Some other companies are holding onto smaller segments of the companies.

Rolls-Royce

Rolls-Royce may refer to:

Rolls-Royce Motor Cars, the current company incorporated in 1998, a subsidiary of BMW Group

Rolls-Royce Limited, the original company founded in 1906, now defunct

Rolls-Royce plc, an aerospace, power systems and defence company incorporated in 1971 and Rolls-Royce's current principal operating company

Rolls-Royce Group plc, a holding company incorporated in 2003 which bought its principal operating company, Rolls-Royce plc, in 2003

Rolls-Royce Holdings plc, a holding company incorporated in 2011 which bought Rolls-Royce plc from Rolls-Royce Group plc in 2011

Rolls-Royce Deutschland

Rolls-Royce Marine Power Operations

Rolls-Royce North America

Rolls-Royce Turbomeca

Rolls-Royce Kamawea now Rolls-Royce AB

Rolls-Royce Controls and Data Services

Rolls-Royce Motors, owner of the former car division incorporated in 1973 and bought by Vickers in 1980 and a subsidiary of Volkswagen Group from 1998 to 2002

Sears Holdings

Sears Holdings Corporation (now referred as "Old Sears") is an American holding company headquartered in Hoffman Estates, Illinois. It was the parent company of the chain stores Kmart and Sears and was founded after Kmart purchased Sears in 2005; it filed for Chapter 11 bankruptcy in 2018 and sold its assets to the ESL Investments in 2019. It was the 20th-largest retailing company in the United States in 2015.

Subsidiary

A subsidiary, subsidiary company or daughter company is a company that is owned or controlled by another company, which is called the parent company, parent, or holding company. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a government or state-owned enterprise. In some cases, particularly in the music and book publishing industries, subsidiaries are referred to as imprints.

In the United States railroad industry, an operating subsidiary is a company that is a subsidiary but operates with its own identity, locomotives and rolling stock. In contrast, a non-operating subsidiary would exist on paper only (i.e., stocks, bonds, articles of incorporation) and would use the identity of the parent company.

Subsidiaries are a common feature of business life, and most multinational corporations organize their operations in this way. Examples include holding companies such as Berkshire Hathaway, Jefferies Financial Group, WarnerMedia, or Citigroup; as well as more focused companies such as IBM or Xerox. These, and others, organize their businesses into national and functional subsidiaries, often with multiple levels of subsidiaries.

Surinam Airways

Surinam Airways (Dutch: Surinaamse Luchtvaart Maatschappij), also known by its initials SLM, is the flag carrier of Suriname, based in Paramaribo. It operates regional and long-haul scheduled passenger services. Its hub is at Johan Adolf Pengel International Airport. As of July 2012, Surinam Airways was wholly owned by the Government of Suriname.

The Muppets Studio

The Muppets Studio, LLC, formerly The Muppets Holding Company, LLC, is a wholly owned entertainment subsidiary of Disney Parks, Experiences and Products, formed in 2004 through The Walt Disney Company's acquisition of The Muppets and Bear in the Big Blue House intellectual properties from The Jim Henson Company.

Uganda Refinery Holding Company

Uganda Refinery Holding Company (URHC), is a government of Uganda-owned parastatal company, that is a 100 percent subsidiary of the Uganda National Oil Company, whose purpose is to hold the shareholding in the Uganda Oil Refinery and related infrastructure, that is assigned to the Ugandan government. The company was incorporated as a private limited liability company, under the Companies Act of 2012.

Yingli

Yingli (Chinese: 英利), formally Yingli Green Energy Holding Company Limited (Chinese: 英利绿色能源控股有限公司; pinyin: Yīnglì Lǜsè Néngyuán Kònggǔ Yǒuxiàn Gōngsī - . Yingli Green Energy Holding Company Limited , known as "Yingli Solar," is one of the world's leading solar panel manufacturers. Yingli Green Energy's manufacturing covers the photovoltaic value chain from ingot casting and wafering through solar cell production and solar panel assembly. Yingli's photovoltaic module capacity is 4 GWs.

Yingli is headquartered in Baoding, China and has more than 30 regional subsidiaries and branch offices and has distributed more than 15 GW solar panels to customers worldwide. Yingli Solar was established in 1997 and was the world’s largest PV module manufacturers in the world in 2012 and 2013. Yingli was founded by Liansheng Miao who was a pioneer in Chinese solar manufacturing. Miao worked to persuade other people to encourage the growth of Chinese solar industry as Miao saw that solar manufacturing is an industry in which China can be competitive.

Yingli expanded production capacity at a time module prices slumped. Yingli recovered slowly and since early 2015 has faced financial difficulties and has been going through a debt restructuring out of court. In 2015 signed a contract with LONGi to cooperate on monocrystalline products. In the first quarter of 2016 Yingli posted a profit first time since 2011. Yingli has cut workforce and decreased R&D spending. Yingli's cost per watt is 41 cents. The company was a sponsor of the 2014 FIFA World Cup, U.S. men’s and women’s national soccer teams, and FC Bayern Munich.Yingli is a member of the ‘Silicon Module Super League’ (SMSL), a group of big-six c-Si module suppliers in the solar PV industry today. The other five members of the group are Canadian Solar, Hanwha Q CELLS, JA Solar, Trina Solar and Jinko Solar.

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