holding company is a company that owns other companies’ outstanding stock. A holding company usually does not produce goods or services itself (with no eponymous consumer-facing brand at most times); rather, its purpose is to own shares of other companies to form a corporate group. However, in many jurisdiction of the world, holding companies are usually termed as parent companies who besides holding stock in other companies can conduct trade and other business activities itself. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies.

Holding companies are also created to hold assets such as IP and trade secrets that are protected from the operation company. This creates a smaller risk when it comes to litigation.