If I owned two companies, why would I make a third company to own them both, instead of just putting them both in my own name?
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First, taxes. This varies greatly by country though so I can’t give a simple explanation for all countries.
Second, stocks. Publicly traded companies usually have a board of people running the company. This people are made up of both elected employees and large share holders. For example, if someone owns 30% of a company, they’ll be on the board even without being voted. The chief of marketing of the company will be voted on the board even if they don’t own many stocks.
A holding company allows a board of just share holders. Literally the company is just people that just hold a lot of stocks. If a company is worried that some third company is trying to buy up a majority of stocks in order to have a hostile take over, then this concerns the board of the holding company, but not the producing company.
Basically, if you want to call a meeting of each person who owns at least 10% of a company, you’d call a meeting for the holding company’s directors. If you want to call a meeting of each person who is in charge of producing something at the company, you call a meeting of the producing director’s.
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