A holding company which can also be referred to as a parent company is a corporation that owns a higher percentage of the stocks & voting right of another firm known as the subsidiary to control the management and policies of such firm.At the AGM of the subsidiary,the holding company has the veto power of choosing the members of the board because they have the highest voting power.
A holding company can take up a subsidiary on terms of merger or acquisition.A holding company’s operation consist of overseeing the companies it owns. It can hire and fire managers if necessary,although the holding company does not manage the day-to-day operations of the companies it controls but forms policies.
The financial statement is always consolidated as a group account thereby presenting the financial statement wholly.
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