holding company


holding company
A company that usually confines its activities to owning stock in, and supervising management of, other companies. A holding company usually owns a controlling interest in the companies whose stock it holds. In order for a corporation to gain the benefits of tax consolidation, including tax free dividends and the ability to share operating losses, the holding company must own 80% or more of the voting stock of the corporation. I.R.C. No. 243.
See also investment company.
Personal holding company. A closely held corporation which receives personal holding company income. Personal holding income includes but is not limited to: dividends, interest, rents, royalties, etc. If a company comes within the definition of a personal holding company, it may be subject to the regular corporate tax, as well as a personal holding company tax on the undistributed personal holding company income. The tax is imposed to prevent individuals from accumulating income in the corporation and not subjecting the individuals to the personal income tax on the earnings.
- personal holding company

Black's law dictionary. . 1990.

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