Holding company is any company which holds a majority or a large enough minority of the stock in another corporation to control its policies. The holding company may control the appointment of officers and may dictate business policies. Corporations controlled by holding companies are called subsidiary companies.
Corporation A might buy controlling interest in both Corporations 1 and 2. Corporation B might similarly buy control of Corporations 3 and 4. Corporations A and B have become holding companies, and Corporations 1, 2, 3, and 4 have become subsidiary companies. A third large corporation, C, might buy control of both Corporations A and B. This process, called pyramiding, has created financial empires, especially in public utilities, banking, and manufacturing.
