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A holding company can hold its own tangible and intangible assets. These
may include land, building, intellectual property and trading stock. Further, it is
not limited to holding these.
A holding company can hold, borrow and lend property and make investment
decisions. It can use this property to its advantage and the benefit of its
creditors of subsidiary companies.
Directors of each company must act in the best interests of their corporation
The holding company and its subsidiary companies are each separate legal
entities with their own Board of Directors. The Board of Director has a
responsibility, under the law, to act in the best interest of their company. The
Board of Directors cannot act in the best interests of a third party company.
Tax planning
The holding company may be set up in another country that offers a lower
corporate tax rate.
The holding company may be an advantageous structure, in that it usually has
lower tax rates than a trust would usually have.
Succession planning
A holding company may ensure the continuity of business, even on the loss of
key people.