The holding is a system of commercial organizations. It includes a management company that owns shares and / or a controlling interest in subsidiaries and subsidiaries.
Instructions
Step 1
The management company can perform production functions, not just management ones. Subsidiaries are economic companies, the actions of which are determined by another main (economic) company or partnership, either in accordance with an agreement concluded between them, or otherwise.
Step 2
Holding companies are created for a specific purpose. This is, for example, reducing costs or conquering new market sectors. These factors increase the value of the company, as well as its capitalization. In order to achieve this goal, it is necessary to effectively work the entire system, and not just the management company. There are several ways in which a limited liability company can join a holding.
Step 3
First, as a result of horizontal integration. Those. by gaining control over organizations united by one type of business (food industry, mechanical engineering, etc.) or by successive affiliation. The main goal here is to conquer new market sectors.
Step 4
Secondly, as a result of vertical integration. Those. by combining enterprises (organizations) of a single technological cycle (production from raw materials to finished products). The main goal of the merger is to achieve price stability, reduce overall costs, and increase the value of the company.
Step 5
An LLC can also enter into a holding company if it is created by sequential selection of enterprises and their subsequent joining a group. This policy will allow the holding to avoid large losses in the event of a bankruptcy of a new enterprise or ineffective work.
