what is a ultimate holding company

What is an Ultimate Holding Company and when should I use one

An ultimate holding company, as the name suggests, is a company that has ultimate control over another company. In short, it is a company that controls another company. An ultimate holding company can have many subsidiary companies, but it can not be a subsidiary itself.

An example of this scenario might be this. Company B has shares which are all held by Company A. Company A’s shares are all held by several individuals (or shareholders even). Therefore, Company A is the ultimate holding company of company B. The ultimate holding company while it is the primary owner of its subsidiary company/ies, it does not have a say in the day to day running of the business. It can however, dismiss managers and company CEO’s if the need should arise.