Holdco

DEFINITION of 'Holdco'

An abbreviation for holding company. A holding company is a firm that is established in order to exercise control over one or more other firms. This is accomplished through the acquisition of stock that is sufficient to control or influence voting. The holding company earns money by collecting the dividends from the shares of firms in which it owns a controlling interest.

BREAKING DOWN 'Holdco'

The establishment of a holding company can be both less expensive and legally complicated than a merger or consolidation, making it an attractive means of gaining control of another company. A holdco is also known as a parent company.

RELATED TERMS
  1. Direct Investment

    1. The purchase or acquisition of a controlling interest in a ...
  2. Detective Control

    A type of internal control mechanism intended to find problems ...
  3. Holding Company

    A parent corporation that owns enough voting stock in another ...
  4. Parent Company

    A company that controls other companies by owning an influential ...
  5. Controller

    An individual who has responsibility for all accounting-related ...
  6. Control Stock

    1. Equity shares owned by major shareholders of a publicly traded ...
Related Articles
  1. Investing Basics

    What's a Holding Company?

    A holding company is a corporation that owns enough voting stock in another company to control its management and policies.
  2. Entrepreneurship

    Keeping Control of Your Business After the IPO

    Taking a company public doesn't mean founders must completely give up calling the shots. Before the IPO, consider these tactics to keep control after it.
  3. Professionals

    Controller: Career Path & Qualifications

    Find out what it takes to become a financial controller, starting with undergraduate educational requirements and moving into professional certification.
  4. Professionals

    Controller: Job Description & Average Salary

    Learn about becoming a controller and what the job entails. Understand the education and skills required, and how much money you can expect to make.
  5. Professionals

    Career Advice: Accountant Vs. Controller

    Learn about the differences between controllers and accountants, how the two are related and which is the best career choice for aspiring bookkeepers.
  6. Economics

    Oligopoly

    Learn how a particular market can be controlled by a small group of firms.
  7. Investing Basics

    How Do Internal Controls Work?

    Essentially, internal controls limit fraud and other illegal activities.
  8. Professionals

    Common Interview Questions for Controllers

    Learn more about the job description of a financial controller and questions that may be asked of applicants applying for this position.
  9. Investing

    What's an Acquisition?

    In corporate terms, an acquisition is the purchase of a company or the division of a company. Some acquisitions are paid in cash, while others are paid with a combination of cash and the acquiring ...
  10. Economics

    What is a Firm?

    A firm is a business or organization that sells goods or services on a for-profit basis.
RELATED FAQS
  1. What's the difference between a merger and an acquisition?

    Learn about the difference between mergers and acquisitions. Discover what factors may encourage a company to merge or acquire ... Read Answer >>
  2. Does the buyer or the seller control a call option?

    Buy call options and maintain control over the price you pay and when to buy a given stock. Learn how to maintain control ... Read Answer >>
  3. What is the difference between a stock buyback and management buyout?

    Each share of stock sold in the market represents partial ownership in the issuing company. If an individual or entity buys ... Read Answer >>
  4. What is the difference between private equity and venture capital?

    Learn the differences between private equity and venture capital, especially in terms of how these types of firms invest ... Read Answer >>
  5. How does a merger affect the shareholders?

    Explore the effect of a merger and understand how the process affects shareholders of the newly merged firm in terms of stock ... Read Answer >>
  6. In M&A how does an all-stock or all-cash deal affect the equity of the buying company? ...

    Mergers and acquisitions (M&A) are forms of corporate restructuring that are becoming increasingly popular in the modern ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center