Anyone know about a Holding Company.

Question

Hello everyone, is there anybody who have an idea about establishing a Holding Company in India. How to start it and how to register the holding company in stock exchanges so that in return a holding company can invest in its subsidiary companies?

Answer 1

Holding Company is a company whose sole purpose is to own shares in other companies. The key distinction between a normal company and holding company is its objectives. At the time of registration of a normal company, you need to specify the main objectives of the company. And these objectives definethe areas of operation for a company. Hence, a company which was initially registered to provide IT services is legally not allowed to get into transportation unless the Articles of Association and ojectives are changed in the existing company. If the same comapny keeps on expanding into other areas, the minority shareholders may not be happy with the decisions. Inthat case, the promoter or the majority shareholder creates a seperate company whose sole purpose is to hold the shares of the original IT company. Now, the holding company does not produce any services or goods. Its sole income is through dividends given by the companies in which it holds shares and through profits realized through sale of the shares it holds inother companies. With this income, the holding company can foray into any sector by creating a wholly owned subsidiaries for different fields. The crux of a holding company is to decouple the risks faced by a company due to operatuions in variaous business sectors. And it also helps in centralizing the command across companies in which the promoter of the holdng company has shares.

Answer 2

Funny Question

If some one want to be Grand Pa

First ONE should have a child

and then think of Grand Pa

You cannot Float and register a company as HOLDING company

You can register and Investing Company

then start acquiring shares in other companioes and Graduate to a Holding company

Good luck