Financing of the holding company is very important, you may seek financing from partners or other sources as you will need funds to start up a holding company.
The valuables of subsidiary companies are stored with the holding company, you should create separate company accounts for the parent and subsidiary companies and store all funds to be used for your holding company in its account.
The holding company would not be held responsible for the drawbacks of the subsidiary companies if you register and operate them as two individual entities.
A limited liability company is not a corporation as it is the combination of the flow through income of a sole proprietorship and the fixed liability of a corporation.
Holding companies are mostly of two structures, a corporation or a Limited Liability Company (LLC).
To provide assets with maximum security and for a more profitable taxation you may decide to form two Limited Liability Companies in different states, a holding company and a subsidiary company.Here is a free business plan for starting a holding company.Reduction of taxes and assets security are the two most common benefits of a holding company.If YES, here is a sample holding business plan template & feasibility report you can use for FREE. It is about a similar matter that we seek to draw your attention to.Many times, businesses fail due to lack of proper planning.Records should be kept on business dealings between your holding company and its subsidiary companies, the records of your holding company should be kept aside from that of the subsidiary company, employees working under the subsidiary company should also be paid by it as the holding company would only concern itself with the general control of the subsidiary.Employ the services of an accountant who would keep tabs on transactions between the holding company and subsidiary company.Make sure your holding company is in conformity with all laws and tax regulation of setting up a holding company in your state.After deciding your business structure, you will need to register your business with your state by providing details such as; business name, agent’s name, and an article of incorporation or article of association which contains important business information such as the purpose and goals of the business and officers or agent’s names and address.A holding company can provide assets security of highly valuable assets of subsidiary companies, you should consider the benefits you want to gain from in starting up a holding company.The holding company also loans assets to subsidiary companies to perform their operating functions.