Starting Your Own Holding Company Biz

Are you a budding business tycoon? Do you have interests in several companies that you want to expand? Do you want to consolidate your interests in various business firms and centralize its general operations? Why not form your own holding company biz today.

Accordingly, here is a simple, yet effective guide to startup your own holding company biz.

A holding company is one that owns majority of the stocks in another firm, which enables it to have a control on the management and operations by having sufficient number of board of directors to pursue its policies. Establishing one’s own holding company may require large amounts of capital and investments, but will prove to be a successful venture if managed and operated properly. Accordingly, the following is a simple holding company biz guide for every entrepreneur.

Formulate a Holding Company Biz Plan

It is necessary for the success of your holding company that a proper plan has been laid out. Determine all of the important factors with regard to the company. The primary consideration is the startup cost of the holding company biz. Admittedly, this business venture entails a relatively large capital and investment to form the “parent company”. In order to prevent loss in time, money and effort, it is advisable to plan the investments appropriately. Invest only in companies with steady growth in its operation for the last couple of years. Study carefully the history of the company, especially its financial status before investing on it. This background study should also include the holding company biz competitors and target clients of every company you want to invest in.

The next thing that should be included in the plan is the management and operations strategy. Determine how you are going to run your holding company with several smaller entities under it. Devise a plan for operations and how to manage each and every company. It is important to think ahead and have a definite goal.

Where to start your holding company biz is also essential. It must be located in the center of operations of the business firms under your holding company. Find a suitable place, preferably at the center of the city’s financial district. In this way, you will always be in tune on the latest developments in the business and financial world.

Comply With All the Legal Formalities Needed by Your Holding Company Biz

Another consideration is complying with all the legal formalities. Every company needs to be registered in accordance with the requirements provided by law. Register your company and secure a holding company biz license for your business operations. Inquire with the proper government agency to know all the requirements. The name of the company must also be properly registered. These may be time consuming and the paper works burdensome, but this is one of the best ways to establish the integrity and good name of your holding company.

28 Comments

  • Philip said on December 6, 2008
    Can I start a holding company and buy stocks of companies under that holding company's name? I wouldn't own large amounts of stock to give me control, just very small individual amounts. For instance, establish a holding company named abc holdings and own say 100 shares of xyz company, 100 shares of abc company, etc. a very small individual amount.
  • Jalan said on January 17, 2009
    Philip,
    Yes you can start a holding company with purchasing a minority share of the respective company of interest. I suggest you pick up some books on Warren Buffett, and study them. He started Berkshire Hathaway in that manner. Over time purchasing more of the company until he was either majority shareholder or own the company as a whole. Check out amazon.com they have plenty of books on Mr. Buffett. Best of luck to you.
  • Joe said on March 20, 2009
    I'm thinking of starting a holding company and buying shares of other companies as well as owning franchises such as Taco Bell or Hollywood Tans. Should I look to private equity firms for start up financing? And what are some good books on starting a holding company? Please email me at jammixmaster@aol.com with any help and suggestions. Thanks in advance
  • Raj said on August 24, 2009
    I would like to invest in rental properties, buy stocks of other companies etc. Is it advisable to form an "Investment company" with a capital and then invest as above instead of doing it all in my name as a single person? This way you can show expenses incurred towards running the business and it will be more clean. Please advise and suggest any relevant book also.
  • Rick said on January 29, 2010
    We would like to pull some money out of my wife's 401K, but she is still employed with the company and is still contributing to the 401K. We are under the age of 59 1/2 and can't touch any of the 401K at this time with out taking out a loan on it or having a huge tax on it. Could we form a holding company or LLC and rollover the money from the 401K into that?
  • Jake said on March 1, 2010
    New York, Duchess County. Are there any special licenses necessary to run or own a holding company... And, a sub-account within the holding company is going to be set up for a large deposit of pre-taxed funds... are those funds reported to treasury or IRS and is the account protected with the deposit until a withdraw is made to an LLC for a transaction to occur then taxed?....
  • nasibe said on May 14, 2010
    i have a suggestion for controlling and managing a holding company in toronto in canada, as i have some banking experience in field of trade service and also the holding company is active in field of importing iron, i receive this suggestion, but i want to know more about a holding company and also the responsibility and commitment of manager or director of this kind of company under the rules of canada, thank you in advance
  • Jenny said on June 9, 2010
    Toronto, Canada. I like investing in real estate and have been doing it personally and not under a business - stupid I know. In order to take advantage of tax laws in Ontario, Canada, would it be smart to start a holding company and a real estate company then use the holding company to invest in the real estate company to acquire properties?
  • thabo said on August 6, 2010
    i want to open an investment holding company with interests in the following sectors: property, logistics, hospitality. wellness/fitness/beauty and communications but i'm still not sure on the funding options as a start up..plz advise!
  • Tien Pham said on August 21, 2010
    I am a student. I want to start a holding company with LLC form. Can I buy stocks of the public traded corporation as a minority owner? How will I file tax for the holding company?
  • Gary said on August 26, 2010
    I want to purchase bank owned properties with no money down. Can I buy Foreclosed, or bank owned properties by signing a contract to where I can defer payments for 4-6 months, which would allow me to get into the properties fix them up and get them rented. Will banks sell there foreclosed, and or vacant Properties this way? Plz advise, thank you!
  • Katharine said on October 12, 2010
    Nashville, TN. I have a self directed 401k which I own several businesses that pay income directly to my 401k tax deferred. I am an investor in a business that earns a substantial amount of income that I pay taxes on every year. The accountants for investing partners will not allow my 401k to purchase my shares. They will allow me to purchase the shares through a holding company. Is it possible to start a personal Holding company to buy the shares and allow the 401k to buy the holding company and receive the income tax deferred in this way?
  • chris said on April 23, 2011
    I want to start a holding co to invest in real estate/land commercially and lease to developers for cash flow pls advice in steps
  • teboho said on September 14, 2011
    I want to start a holding company in order to umbrella all the 2 companies I have already started, how do I go about with the process, pls advice...
  • Lilian said on October 3, 2011
    Someone suggests that I should start a holding co. to umbrella my own trade company, because my own trade co. is starting profits this year. how do I process and consider more details about the initial capital while my own trade co. currently is about even with old debt. Please advise, thank you very much.
  • Lindsay said on November 18, 2011
    I am a Accounting and Finance student looking to create a holding company in California. I want to know if I would be able to start off with purchasing minority shares in both public and private companies, as well as use private equity investments such as LBOs to acquire private companies in diverse industries? I have interests in buying stocks in public companies to grow the holding company, but would also like to know if it would be possible to do that as well as buy in to franchises and mom & pop companies as well? Any advice or assistance would truly be appreciated.
  • Connor said on December 15, 2011
    Lindsay, I am Also a finance student interested in the same but on the equity side if you or anyone are truly motivates to do this, I would be eager to persuade this venture as a team. If anyone is interested in doing this please do not hesitate to contact me at 917 912 1933 Best Wishes, Connor B. Lyman
  • K.Money said on July 14, 2012
    There is a total difference in starting a holding company and starting a equity investment firm. By definition a holding company is a company who owns a MAJORITY of any company. Anything less than majority is an equity firm. Either way one can still start a business in investing in public or privately held companies.
  • adam said on August 7, 2012
    I am a management major located in the DC area looking to start a holding company with a LLC form .Can i buy stocks traded on the OTC or Pink sheet stocks. Owning small amounts of various penny stocks and working my way up. Is this possible without having an initial large capital investment.
  • Scott said on August 26, 2012
    Rapid City South Dakota. I have so many people in the oil market and friends who want me to invest in there business. I want to start a holding company to keep it all straight and quit my job and do it full time with a formal office to keep me busy. I want others to invest with me in my adventures. What will i need to do to start this holding company for paper work and to be with in the law. LLC or INC,
  • Madzuhe phathutshedzo said on September 26, 2012
    ..Thohoyandou..southafrica at Limpopo..i am a student whom study at thohoyandou technical high. i wanna start my holdings company and am 15yrs old. i would like to be advised and know more about holding company. i would like to be communicated through my email. madzuhephathutshedzojoshua@gmail.com..thanx in advance
  • Bryan said on January 23, 2013
    i have a LLC and i want to have a holdings company inc. and how can i have my LLC under my holdings company and since i am in Florida USA i want to know if that is possible
  • Mash said on May 5, 2013
    I am trading in stocks individually, and like to be organaised with establishing a company for this purposes. I am wondering about that I may need or meet some regulatory guidelines to do this. Please let me know if this is possible.
  • Antwan said on July 6, 2013
    I am located in Grand Rapids, Mi, USA. I am planning to start a holding company. I would like to start by owing Insurance franchises before I buy whole businesses or a minority to majority interest in a publicly traded company. I have two questions. First I would like to know as the parent company to the insurance franchises I own will i have access to their "float" capital ( I.e. premiums) to make my purchases. Secondly what kind of loans are available to my holding company if I wanted to finance a business with borrowed money? Lastly what books should I study about investing or holding companies? Please send reply to my email address Antwan_alk@yahoo.com
  • Bryan said on February 21, 2014
    can i flow cash into my holdings company or no?
  • suresh bhaskar said on June 3, 2014
    You should initially use mncincorp to register in the USA and you can get tons of business out there as in direct projects . Please dont go for third party projects that will loose all credibility. using mnc incorp you will become an MNC with offices around the globe. "MNC Incorporations" assists Indian clients with expanding their business into the US & Australian Market. Our US Incorporation Packages include everything you need to Register, setup your Company, Business Address, Bank Account & Merchant Account. we will answer all your queries 08592092060 or info@mncincorp.com
  • alutiaj said on July 15, 2014
    good work but teach me more about holding companies
  • JAYAVANTH SHENOY K said on November 30, 2016
    Dear Sir, I want to start a New Hoding company That is " Deepa Stock Hoding" And here I dont need any clients. I am only Investing directly in to the share market. My capital is 5Laks. I already created my Demat Account at ICICI bank . Actually I thought that 1st i am hiring few employees and providing training to them. afterwords i am starting to invest in share market (daily purchasing and selling not for long term). I want to create some job opportunities thats why i am hiring employees. Dear sir my question is CAN I SUCCEED? CAN I GET GOOD RETURN? CAN I HANDLE IT? PLZ SUGGEST ME

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