How to enter a holding company LLC
Video: How To START A BUSINESS As A "Holding Company"! #FreeGame 2024, July
Holding is a system of commercial organizations. It includes a management company that owns shares and / or a controlling stake in subsidiaries, and subsidiaries.
Instruction manual
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A management company can perform production functions, and not just management ones. Subsidiaries are recognized as business companies whose actions are determined by another main (business) company or partnership, either in accordance with an agreement concluded between them, or in any other way.
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Holding companies are created for a specific purpose. This, for example, cost reduction or the conquest of new market sectors. These factors increase the value of the company, as well as its capitalization. In order to achieve this goal, it is necessary to work effectively throughout the system, and not just the management company. There are several ways in which a limited liability company can join a holding.
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Firstly, as a result of horizontal integration. Those. by gaining control over organizations united by one type of business (food industry, mechanical engineering, etc.) or by successive merger. The main goal here is to conquer new market sectors.
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Secondly, as a result of vertical integration. Those. through the union of enterprises (organizations) of a single technological cycle (production from raw materials to finished products). The main goal of the association is to achieve price stability, reduce overall costs, increase company value.
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An LLC can also enter a holding company if it is created by successive selection of enterprises and their subsequent joining the group. Such a policy will allow the holding to avoid large losses due to the bankruptcy of a new enterprise or inefficient operation.
note
Upon joining the holding, you can solve a whole range of problems due to modern business conditions. For example, to increase the investment attractiveness of a business, reduce production costs, protect against hostile takeovers, increase management efficiency, and manage risks.
Useful advice
A holding company may include one or more foreign legal entities.
