THERE ARE THREE MAIN TYPES OF HOLDING COMPANIES

There are three main types of holding companies. Let's start with a pure holding company. A pure holding company's only job is to own other companies. It doesn't sell products, offer services, or run daily operations itself. Instead, it makes money through its subs. Think of Berkshire Hathaway. It owns companies like Geico and Dairy Queen, but each of those businesses run independently. Next, we have a mixed holding company, also called a parent company. This type of structure does both. It owns subsidiaries and runs its own business operations at the same time. It earns money from its own products and services and from its subs. Think of Johnson and Johnson. They own an entire portfolio of brands, but they also manage parts of their business directly. Then there's the intermediate holding company. You don't see this as often. It owns subsidiaries, but it's also owned by a bigger parent company. This setup is common when a business is scaling and needs an extra layer of separation to manage risks. Oh, and one more thing about pure holding companies. Not all pure holding companies are set up to own other businesses. Some are specifically designed to hold high value assets like intellectual property, equipment, trucks, real estate, crypto, or other major investments. The goal here is asset protection.