What do you mean by holding company limited?

A holding company limited refers to a company that controls another company by holding a certain percentage of shares. Holding companies are divided into pure holding companies and mixed holding companies. Pure holding company does not directly engage in production and operation business, but only relies on the shares held by another company for capital operation; In addition to capital operation through holding, hybrid holding companies also engage in some related production and operation businesses.

The main features of holding company limited are as follows:

First of all, by issuing and selling their own stocks or corporate bonds, we can widely absorb idle monetary capital to buy shares of other companies, so as to control these companies, and then further issue more shares backed by the shares held by these companies, and then further buy more shares of other companies.

Two, the holding company and the controlled subsidiary are legally independent legal persons, based on capital merger and adopting the director system.

Third, the holding company is a whole. The controlling parent company controls the controlling stake of the controlled subsidiary. The major decisions of subsidiaries are basically decided by the board of directors of the parent company, and the behavior of subsidiaries will be regulated by the parent company.

Four, holding companies generally implement diversification, product serialization and diversification. The purpose of this is to reduce market risks.