Holding Company

A corporation that limits its business to the ownership of stock in and the supervision of management of other corporations.

A holding company is organized specifically to hold the stock of other companies and ordinarily owns such a dominant interest in the other company or companies that it can dictate policy. Holding companies must comply with the federal ANTITRUST LAWS that proscribe the secret and total acquisition of the stock of one corporation by another, since this would lessen competition and create a MONOPOLY.