Do You Need a Holding Company

What is a Holding Company?
A Holding company is a strategic company that exists primarily to own and manage a diverse
portfolio of corporate investments. Corporate investments could include a variety of passive
assets built up from prior corporate business operating profits like: an investment stock portfolio;
investment real estate properties or even subsidiary operating corporation share interest.
Holding companies serve as another layer of protection for most of our successful corporate
clients and where they can accumulate their passive investment portfolio.

Holding Companies vs. Operating Companies:
While operating companies directly engage in the production and sale of goods or services,
holding companies focus on overseeing and managing the surplus assets created by these
operating companies. Operating companies are on the front lines of business activities, while
holding companies serve as another layer of protection to ensure that these hard-earned
operating profits are safe from any legal issue that could arise in the operating company.

How to Know if it’s for you: The Benefits of a Holding Company
Here are the advantages that a holding company brings to the table:
      ● Asset Protection & Risk Management
      ● Shielding assets from potential liabilities of subsidiary businesses provides a protective
barrier that safeguards the holding company’s assets from the risks faced by its
subsidiaries.
      ● Limiting risks and protecting personal wealth by separating the liabilities of individual
subsidiaries from the holding company’s overall financial health, ensuring the safety of
the owner’s personal assets.

A Holding company is not appropriate for all our clients. We have seen many clients
incorporate a holding company way too soon and have to pay the additional accounting a
legal fees each year before the Holding company becomes really worth it. Having a
holding company can be a complicated endeavor, especially with the added accounting tasks.
That’s why our accounting services at Louis Picco are here to help business owners like yourself
to make an informed decision on when a holding company would be helpful for your overall
corporate structure.

Quote:
“There is no passion to be found playing small – in settling for a life that is less than the
one you are capable of living.”

-Nelson Mandela