What are the advantages of opening a holding company?

Did you know that setting up a holding company can be a smart strategy to boost your investments and protect your assets?

From facilitating succession planning to maximizing tax benefits, the possibilities are many for those seeking stability and sustainable business growth.

To find out more about the subject and clarify a series of important doubts, stay with us and follow this content to the end.

What is a holding company?

One holding is a company whose main function is to own and control shares in other companies, rather than producing goods or providing services directly.

In practice, it holds shares in other companies in order to influence their decisions and operations. This type of legal entity can be used for various purposes, such as:

• Strategic control;
• Succession planning;
• Tax benefits;
• Asset protection;
• Centralization of administrative and management functions.

Read more about: How to reduce taxes and manage wealth with Family Holdings?

What are the types of holding companies?

There are mainly two types of holding companies:

• Pure Holding: This holding company is created exclusively to own shares in other companies. It does not carry out any other economic activity apart from controlling and managing the companies in which it has a stake.
• Mixed Holding: In addition to owning stakes in other companies, this holding company also carries out its own economic activities, i.e. it actively participates in commercial or productive operations, as well as managing its stakes.

Both structures serve to facilitate the control and management of a group of companies, but the choice between a pure or mixed holding depends on the specific objectives of its owners and the nature of the businesses involved.

In addition to pure and mixed holding companies, there are other types of holding companies that can be classified according to their objectives and forms of operation:

• Holding company: Created to manage the assets of partners or shareholders, facilitating the management and protection of property such as real estate, investments and other assets.

• Family holding companies: It is mainly used for succession planning in family businesses, facilitating the transfer of assets and the management of wealth between generations.

• Holding company: Focused on holding stakes in various companies, generally with the aim of diversifying investments and reducing risks.

• Operational holding: In addition to holding stakes in other companies, it also operates directly in one or more sectors, carrying out relevant economic activities.

• Financial holding companies: Created to manage and control the finances of a group of companies, centralizing activities such as financing, treasury and investments.

Each type of holding company serves specific purposes and can be structured to meet the particular needs of its controlling shareholders and the companies that make up the group.

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What are the main advantages of opening a holding company?

The decision to open a holding company can offer a number of advantages for entrepreneurs and investors:

• Consolidation and control: The holding company makes it possible to consolidate shareholder control over several companies, facilitating the coordination of corporate strategies and decisions.

• Efficient management: By centralizing administrative, financial and operational functions, the holding company can improve operational efficiency and reduce costs through economies of scale.

• Investment diversification: By holding stakes in different companies and sectors, the holding company makes it possible to diversify the investment portfolio, reducing the risks associated with a single business.

• Succession planning: It facilitates succession planning and the transfer of assets between generations in family businesses, providing a more organized and stable structure.

• Tax benefits: In some situations, holding companies can enjoy tax benefits, such as tax exemptions on dividends and capital gains between companies in the same group, depending on the applicable tax structure.

• Asset protection: By separating the assets of different companies into separate legal entities, the holding company can offer additional protection against possible liabilities and litigation from one of the companies in the group.

• Easy fundraising: The existence of a consolidated holding company can facilitate the raising of financial and investment resources for projects and expansions of the group's companies, due to its greater credibility and organizational structure.

• Strategic flexibility: It allows greater strategic flexibility to adapt to market changes and business opportunities, facilitating mergers, acquisitions and corporate restructuring.

So, as we can see, setting up a holding company can offer significant advantages for efficient business management and asset protection.

Read more about: Family Holding the essential strategy for asset management and protection in 2024

How to open a holding company?

To open a holding company, you need to follow a few basic steps:

1 Planning and strategy:

• Define the purpose of the holding company: what the main objective of the company will be (control of other companies, asset management, diversification of investments, etc.).

• Decide on the ownership and control structure: who will be the shareholders and directors of the holding company.

2 Drafting legal documents:

• Prepare the holding company's constitutive documents, including a memorandum or articles of association detailing the control structure, the responsibilities of the directors, the rules of operation, among other items.

3. company registration:

With the support of a specialized accounting firm like CLM Controller, take care of the procedures for opening the holding company and its respective legalization, including:

• Registration of the holding company with the Board of Trade;
• Issuing the CNPJ;
• Issue of State Registration;
• Issuing the Municipal Registration;
• Release of the Location and Operation Permit.

4. Other important steps:

• Open bank accounts in the name of the holding company to facilitate the company's financial and operational movements.
• Establish sound financial and operational management practices to guarantee efficiency and transparency in the holding company's administration.

Each step must be carefully planned and executed to ensure that the holding company is established according to best practices and in compliance with the law.

The support of specialized professionals such as accountants and lawyers is essential to ensure that everything is done according to plan and within the legal limits.

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Open your holding company with CLM Controller Contabilidade

Maximize your investments and protect your assets with CLM Controller Accounting.

With the expert guidance of CLM Controller AccountingYou can open your holding company with confidence. Our team of experts in accounting, tax planning and succession offers personalized support at every stage of the process:

• Legal structuring: We guide you in choosing the ideal type of company and in drawing up the legal documents needed to register your holding company.
• Asset management: We offer solutions to protect your assets, ensuring compliance with tax and regulatory standards.
• Ongoing consultancy: We support your holding company with ongoing advice on tax and accounting management.

Contact us today for an initial consultation and find out how we can help you achieve your goals and set up your holding company.