A holding company is a legal entity that owns other companies’ assets and/or shares. It does not engage in any business activity itself, but it holds its subsidiaries to manage them. It also protects its shareholders from any liability issues by isolating their assets from the liabilities of its subsidiaries.
Holding companies are often used to hold shares in other businesses, however they can also be used to hold intellectual property, cash assets, real estate, investments, stocks and shares or any other property that can be structured as a company asset.
Holding companies are usually established for the purpose of having one central control point for a group of companies and/or their assets and liabilities.