Business administration |
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Management of a business |
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In the United States, 80% of stock, in voting and value, must be owned before tax consolidation benefits such as tax-free dividends can be claimed. That is, if Company A owns 80% or more of the stock of Company B, Company A will not pay taxes on dividends paid by Company B to its stockholders, as the payment of dividends from B to A is essentially transferring cash from one company to the other. Any other shareholders of Company B will pay the usual taxes on dividends, as they are legitimate and ordinary dividends to these shareholders.
Sometimes a company intended to be a pure holding company identifies itself as such by adding "Holding" or "Holdings" to its name.
holding company
Reviewed by bsm
on
August 06, 2019
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