What is min % of shares issued by co that its holding co needs to acquire in order to acquire and retain holding co status?
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Answer:
Explanation:
A holding company is a corporation that is organized for the purpose of owning stock in other corporations. A company may become a holding company by acquiring enough voting stock in another company to exercise control of its operations, or by forming a new corporation and retaining all or part of the new corporation's stock. While owning more than 50 percent of the voting stock of another company ensures control, in many cases it is possible to exercise control of another company by owning as little as ten percent of its stock.
Holding companies and the companies they control have a parent-subsidiary relationship. When a holding company owns a controlling interest in another company, the holding company is called the parent company and the controlled company is called the subsidiary. If the parent owns all of the voting stock of another company, that company is said to be a wholly-owned subsidiary of the parent company.
Holding companies and their subsidiaries can establish pyramids, whereby one subsidiary owns a controlling interest in another company, thus becoming its parent company. While three to five levels are common in corporate pyramid structures, as many as 60 levels have been known to exist in practice. In the case of public utility holding companies, regulations of the Securities and Exchange Commission allow only two levels of holding companies in addition to the operating subsidiaries.
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