What are the main types of holding companies? Find out!
Find out what the main types of holdings are and what they mean!
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Have you heard about the main types of holding companies?
Basically, a holding company is a company that participates in other companies through shares or stocks in its share capital.
But how do they work in practice? What are the main types of holding companies and what are the advantages of each?
That's what you're going to understand now. Keep reading to find out more.
What is a holding company?
The English expression means to control, maintain or hold.
A holding company is a type of company whose objective is to participate in other companies.
In other words, in practice, this type of organization allows a company or its directors to control and exert influence over other companies, known as subsidiaries.
As a majority shareholder, the holding company will make decisions that determine the operation of the other brands.
Therefore, we can say that a holding company is a company like any other, constituted according to a defined corporate type.
A good example of this is Itaúsa, a publicly traded Brazilian investment holding company with over 45 years of experience.
It controls Itaú, Alpargatas and several other companies.
How to open a holding company?
Before anything else, you need to know that regardless of the category, a holding company must be registered and legalized with regulatory bodies.
The first step is to analyze the assets of the founders and beneficiaries.
In this part, strategies for the actions that will be implemented in the holding company must be defined.
Depending on the volume of assets, creating one of the holdings may not be worthwhile from a financial point of view.
In addition, this assessment also includes a general analysis of each partner's companies.
At this point, the ideal is to have specialized advice.
Next, it is necessary to move on to the partner definition stage. It is important that all parties involved agree on the characteristics of the holding company.
By adjusting perspectives with partners, you will finally be able to define the corporate type and the best taxation regime (system that establishes the collection of taxes for each CNPJ).
The next step is to think about the necessary documentation. After all, this part can be a bit complex and you need to make sure that everything is in order.
The articles of association – or bylaws, in the case of a corporation – must be written and signed by all parties involved.
The transfer of assets to the administrator will be carried out through the approval of the necessary documents.
However, before the transfer is made, all administration criteria must be very well established.
What are the main types of holding companies?
It is based on their objectives that holding companies are classified.
Among the main types, we can mention:
1. Pure holding
The purpose of a pure holding company is to participate in companies.
It occurs through participation in the capital of another company, that is, it will manage the controlled companies, directing the operational policies.
In this type of holding, internal changes are implemented easily.
Large holding companies in the national market tend to be pure holdings, as they are formed with the aim of controlling companies.
2. Mixed holding
Due to the tax and administrative benefits it offers, mixed holding companies are widely used in Brazil.
In addition to participation in other companies, its corporate purpose includes an operational objective for profit.
In practice, it aggregates the object of the pure holding company, but with the benefit of generating taxable income for deductible expenses.
3. Administrative holding
The administrative holding company centralizes the decision-making process of one or more companies.
In other words, its objective is to improve and optimize business control, since from its constitution, the central business is the one that makes the main decisions.
For this reason, one of its main advantages is offering professional management.
The administrative holding company professionalizes the company's management and protects the identity of the partners.
In the market, they are usually recognized for their great management capacity.
4. Family holding
A family holding company, As the name suggests, it is characterized by the fact that it is a company managed by members of the same family.
Control of the assets of one or more people in this family is the responsibility of the company.
It is considered a good model for formalizing the process of inheritance and sharing of assets among heirs.
It guarantees the possibility of excluding spouses from corporate participation, which in the event of separation, ensures the integrity of the assets in question.
To avoid conflicts and other problems regarding the company, changes to the holding company must be approved by all members.
5. Asset holding
The asset holding company is an administrator of its own assets.
It is founded to manage assets so that they can be integrated into the company's capital.
In this case, the objective is to optimize management and obtain tax and inheritance benefits.
There is also the possibility of the holding company being set up to facilitate the management of families that own a large number of assets.
It is a family business and, therefore, is usually incorporated as a limited company (LTDA).
However, it can also be a public limited company (S/A).
6. Control holding
It is the type of holding company that holds corporate control of one or more companies.
Its objective is to guarantee management of the business itself, even if third parties participate in the company.
The majority shareholder is protected from potential problems.
7. Holding company
The holding company centralizes the management of companies that have their own company.
This means that its purpose is to centralize the administration of other minority equity interests.
It works only as an administrator and, normally, has specialized professionals who manage the organization and define strategies.
Conclusion
There are several types of holding companies and each of them has its own characteristics, advantages and disadvantages.
As we are talking about a process that involves complex steps, the ideal is for you to have a trustworthy company to provide advice and thus have more security throughout the process.
