Home BUSINESS Holding Company: What Is It For, And What Are The Benefits?

Holding Company: What Is It For, And What Are The Benefits?

Most entrepreneurs have yet to learn the benefits that the establishment of a holding company can offer, thinking that such instruments are only advantageous for large corporations.

If used correctly, a company of this type can become an effective means of protecting one’s profits and family assets and offering significant tax advantages.

What Is Holding?

Let’s start with the definition: the holding company (known in Italy simply as a holding company) is a financial company holding shareholdings or quotas in other subsidiary companies. Therefore, he carries out management and capital management activities for other companies. Thus a pyramid structure is created, at the top of which we find the parent company or parent company (also called parent ), and at the base, the daughter or subsidiary companies ( subsidiaries ). Based on their function and how they operate, holding companies can be divided into three macro-groups:

  • Pure or financial holding companies, whose main activity consists of controlling and coordinating the group companies’ operational and strategic activities. They do not carry out any production or exchange of goods and services.
  • Impure or mixed (or again, operational) holding companies, which not only hold and manage shareholdings in companies but undertake real business activities of a commercial or industrial type.
  • Investment holdings, i.e., holding companies that acquire shareholdings to obtain dividends and capital gains without controlling and managing the daughter companies’ capital.

Now let’s see in more detail the main types of holding companies based on the particular characteristics they assume.

Also Read: Three Steps To Immediately Increase Digital Security In The Company

Types Of Holding

Family Holding

It is certainly the best-known and most widespread form in Italy; the economic and productive fabric is largely made up of family-run businesses, many small or medium-sized (the so-called SMEs). The family holding company is particularly useful for preserving the family assets from external attacks and possible illicit behavior by directors and partners during the transition from one generation of directors to another. Above all, it allows you to administer and manage assets more efficiently.

A Managerial Or Sectoral Holding Company

This holding controls companies united by activities with strategic interdependencies, bringing together businesses operating in complementary sectors to manage them synergistically. The management holding company can be financial and operational, carrying out or not carrying out production activities or exchanging goods and services.


The sub-holding is a holding which is interposed to all effects between the parent company and the subsidiaries operating in the same business sector and is almost always a holding of a financial type.

Advantages Of A Holding

Now that we have seen what a holding company is, let’s find its benefits.

  • Through the creation of a holding company, an entrepreneur has the opportunity to expand his business, extending his activities also in complementary sectors. This is very useful, especially in this historical moment characterized by continuous and profound changes within the economic and productive systems.
  • Another reason for opting for establishing a holding company is the protection of company assets, protecting them from attacks by possible creditors and, in general, from family, inheritance, and tax matters.
  • As we have seen before, creating a holding company can help manage the generational transition, i.e., the process by which the capital and management of a company are transferred from the founders to the successors, to guarantee the company’s continuity.
  • As far as the request for financing is concerned, the presence of a holding company guarantees the undoubted advantage of having greater credibility in the eyes of the banking system, as it can give greater guarantees of solvency and stability.
  • Tax optimization is another good reason to choose the form of holding company. It is, in fact, an excellent tax planning tool since it allows you to take advantage of some special preferential tax regimes (for example, that of the Participation Exemption ), as well as to implement particular strategies that allow for an optimized and more efficient distribution of profits from the point of view of tax levy.

It has been proven that entrepreneurs who turn to Lex e-Business increase the profitability of their business and acquire greater and more conscious control, making a real leap in level.

Also Read: 9 Tips For Scaling Your Accounting Company

Tech Cults
Tech Cults is a global technology news platform that provides the trending updates related to the upcoming technology trends, latest business strategies, trending gadgets in the market, latest marketing strategies, telecom sectors, and many other categories.


TikTok Explained To Parents: Here’s How It Works

TikTok: You will have heard of it. Some speak well of it, some badly. Some have endless fun, and some demonize it. Some consider...

Benefits of Outsourcing Transcription Services

Businesses are gradually finding new ways of communicating, especially with the introduction of remote jobs. For better service delivery, communication has to be inclusive...

How to Create a Successful Client Onboarding Process Template

First impressions are crucial, especially if you intend to create lasting client relationships. A comprehensive onboarding process seeks to elevate clients’ first experiences with...

Aesthetic Usernames for TikTok

On TikTok, aesthetically pleasing usernames are growing in popularity. You must select a catchy username if you want your profile to stand out. When selecting...

Revise Like a Pro: A Step-by-Step Guide for Your Practice HGV Test

If you're gearing up to take the FREE HGV Theory Test Online in 2024, you're likely focused on mastering the ins and outs of...

WhatsApp Game for Friends in 2024

WhatsApp's prominence has cemented its standing as one of the most widely used messaging apps globally. Numerous strategies have been developed to make the...