Question

 

Define a holding company and a subsidiary company. When can a company be  called a subsidiary of another company? Explain.

28 May 2025
Answer :
Word Count : 482
A holding company is a company that has control over another company, usually through ownership of more than half of its voting shares or by controlling its board of directors. The primary purpose of a holding company is to manage and control other companies rather than to engage in its own business operations. It may own the assets and shares of one or more companies, enabling it to influence their policies, strategic decisions, and management. A subsidiary company is a company in which another company, known as the holding company, exercises control. The subsidiary is a separate legal entity from the holding company, meaning it can own property, enter into contracts, and be liable for its own debts. However, due ___ _______ __________ __________ ___ __________.
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