What is a holding?

What is a holding?
✔ Free initial consultation
✔ Specialized lawyers
✔ Over 8000 satisfied clients
✔ One stop service

What is a holding?

A holding is not a legal form in its own right, but rather a structure comprising several companies. Usually, the

GmbH or
UG

is the company form of choice. However, in rare cases, an AG may also be formed as part of a holding structure.

Definition: What is a holding?

“Holding” is a technical term with a specific meaning. It refers to a holding structure, a holding organisation or a holding company. The holding describes a certain way of organising an entrepreneurial operation, which consists of:

the shareholders as owners of the parent company,
a parent company (or umbrella company) as the managing company and the owner of one or more subsidiaries, and
one or more subsidiaries as the operational “spearhead”.

Key points: What is a holding

Examples of holding
Forming a holding
Holding as a form of organisation
Advantages and disadvantages
Variants of the holding

holding founding by a lawyer

✔ CHEAP✔ FAST✔ LEGALLY SECURE

Over

20000

checked cases

JETZT ONLINE GRÜNDEN

Download Documents

↪ or reserve a free initial consultation.

Open questions? – Just call us:

0221 – 6777 00 55

(Mo. – So. from 9am to 22pm / NATIONWIDE – German landline)

Examples of holdings

These are typical examples of holding structures.

Example 1

A founder forms a UG holding parent company as a start-up and is the sole shareholder.

They plan to operate three branches of business:

developing an affiliate website in the field of geriatric care,
developing an affiliate website in the field of optics, and
operating an online marketing agency with a focus on creating online shops, as well as SEA and SEO.

Their objective is to build and sell two Internet portals, that is, to exit. The business plan includes developing and selling a portal for the care of the elderly, and developing a similarly structured optics portal with the same objective of exit, nine months later. The marketing agency should provide for occasional cash flow based on a network of existing and potential customers during this period or, if successful, afterwards, or in the case of further projects. Then, the UGs should also be transformed into GmbHs.

The shareholder is also simultaneously the managing director of the parent company. The parent company is the sole shareholder in each of two subsidiary UGs.

The first subsidiary UG produces and operates the website in the field of geriatric care. The parent company shareholder is the managing director of this subsidiary. It has no employees, and does not plan to hire any.

The second subsidiary UG operates the online agency. The shareholder is the managing director of this subsidiary. Some activities are outsourced to freelancers. Employees are planned in case of need (long-term customers).

The formation of a third subsidiary UG is planned when work starts on the website in the field of optics. The know-how and structures of the first and second subsidiaries will be used for this purpose.

Example 2

Two shareholders each hold 50% of the shares in a GmbH holding parent company.

They plan to operate two branches of business:

engineering consulting and
plant engineering

with regular profit withdrawals from the parent after payment through the subsidiaries.

The shareholders are also simultaneously the managing directors of the parent company. The parent company is the sole shareholder of the three subsidiary GmbHs.

The first subsidiary GmbH (operational) operates a consultancy in the engineering sector. A parent company shareholder is the managing director of this subsidiary. It has several employees.

The second subsidiary GmbH (operational) installs and sells technical systems. The second parent company shareholder is the managing director of this subsidiary and also has an external managing director for added support. There are several employees.

The third subsidiary GmbH (holding assets) holds the assets that are mainly held by the second subsidiary GmbH, including the machinery and raw materials required for the production of the plants. These are transferred by it to the second subsidiary GmbH for use against payment (that is, commercially) in order to keep the assets of the holding away from the assets of the relevant and liable operative subsidiary in a way that does not commercially burden the parent company.

Subsidiaries of the holding

All subsidiaries are independent companies that in principle operate independently of one another, but may also be linked to one another under certain circumstances by investment and simultaneous outsourcing of certain areas of competence. Several variants are conceivable.

Forming a holding

A holding is not a legal form in its own right, but rather an association of several companies. Usually, the

GmbH or

is the company form of choice. However, in rare individual cases, forming an AG as part of a holding structure is also conceivable.

The holding as a form of organisation

“Holding” is a technical term with a specific meaning. It refers to a holding structure, a holding organisation or a holding company. The holding describes a certain way of organising an entrepreneurial operation, which consists of:

the shareholders as owners of the parent company,
a parent company (or umbrella company) as the managing company and owner of one or more subsidiaries, and
one or more subsidiaries as the operational “spearhead”.

Advantages of the holding

The holding offers its founders various advantages.

✓ Tax savings

✓ Risk sharing

✓ Release from private liability

✓ Image

✓ Simple transfer

✓ More effective management

✓ Protects corporate assets

✓ Facilitates growth

Tax advantages

Setting up a holding structure can lead to enormous tax savings. Only 5% of the profits from the operation of the subsidiaries are subject to capital and trade tax when transferred to the holding parent company. The same applies in the event of an exit: 95% of the capital gain from the sale of all or part of the shares of a subsidiary is not taken into account for tax purposes.

Distribution of entrepreneurial risk

By forming subsidiaries for certain branches of your business, you can distribute the business’s overall risk and keep it away from the parent company. If, for example, a branch of the business should fail while other branches remain successful, the faltering subsidiary can be wound up by a GmbH or UG insolvency application without “healthy” parts of your holding structure being affected and having to rescue the ailing branches.

Positive image

Due to the professional entrepreneurial structure of the holding, it has an extremely positive image in legal transactions. Stakeholders as well as customers and business partners value the holding company for its risk diversification and secure financial protection.

Variants of the holding

Holding companies exist in many different forms and are established for various reasons. The following are the two most common holding variants.

Investment holding

The investment holding is the most common form of holding in our practice. Since the introduction of the UG, the investment holding has become more interesting, especially for SMEs (small and medium-sized enterprises). In this form of holding, the parent company assumes the role of shareholder of one or more subsidiaries. The subsidiaries take charge of operations. This provides tax advantages, and keeps entrepreneurial risk away from the healthy subsidiaries.

Operational holding

The operational holding is the classic organisational form for a larger company. A parent company assumes the management function and is essentially responsible for the service production process, that is, the company’s income-producing activity. Subsidiaries serve, for example, as branches abroad, but are usually under the management of the parent company. It is often used for the purpose of vertical and horizontal risk diversification.

Disadvantages of the holding

The main disadvantage of the holding is the higher formation and administrative costs. A parent company is always formed. This company must be managed on an ongoing basis. Expenses such as the IHK contribution and accounting must be paid separately for each of the companies. The higher costs are therefore only justified above certain (expected) turnover levels, though the introduction of the Unternehmergesellschaft (haftungsbeschränkt) makes holding structures interesting for smaller companies too.

Avoiding the high costs of forming a holding also means foregoing the benefits. There is no alternative to the holding structure, with the only remaining option being to form a simple corporation such as the GmbH or UG.

Variants of the holding

Holding companies exist in many different forms and are established for various reasons. The two most common holding variants are the following.

Investment holding

The investment holding is the most common form of holding in our practice. Since the introduction of the UG, the investment holding has become more interesting, especially for SMEs (small and medium-sized enterprises). In this form of holding, the parent company assumes the role of shareholder of one or more subsidiaries. The subsidiaries take charge of operations. This provides tax advantages and keeps entrepreneurial risk away from healthy subsidiaries.

Operational holding

The operational holding is the classic organisational form for a larger company. A parent company assumes the management function and is essentially responsible for the service production process, that is, the company’s income-producing activity. Subsidiaries serve, for example, as branches abroad, but are usually under the management of the parent company. It is often used for the purpose of vertical and horizontal risk diversification.

Financial or asset holding

The financial holding can be understood as the opposite of the operational holding. It has an asset management function and therefore does not exercise strategic or operational management. If it has any influence, it exercises it indirectly by setting financial objectives. Its task is to optimise the value of the group.

Management holding

A management holding aims to combine the management and controlling level of a company in a parent company. The subsidiaries are controlled with identical management measures so that the upper level is outsourced. In most cases, the management holding is located in a country with an attractive tax regime.

Organisational or structural holding

An organisational holding is formed solely for the purpose of optimising the internal organisation. Splitting the individual divisions into separate subsidiaries gives the management level a better overview of the individual business areas.

Hierarchy of a holding

The structure of a holding depends on the objective that the holding structure is supposed to achieve. As a rule, the holding itself, that is, the parent company, constitutes the highest level of the corporate structure. It owns all or a vast majority of the subsidiaries and therefore acts as a shareholder. The subsidiaries themselves operate as independent economic units.

More about Holding Formation

More about GmbH-Holding

gGmbH founding by a lawyer

✔ CHEAP✔ FAST✔ LEGALLY SECURE

Over

20000

checked cases

JETZT ONLINE GRÜNDEN

Download Documents

↪ or reserve a free initial consultation.

Open questions? – Just call us:

0221 – 6777 00 55

(Mo. – So. from 9am to 22pm / NATIONWIDE – German landline)

Your formation team

Andre Kraus
Specialist lawyer for insolvency law

Ahaliya Kapilan
Lawyer

Oksana Enns
Business law graduate

Sara Garcia Corraliza
Lawyer

and a team
of legal advisors, business law graduates and other lawyers

Over

8000

Mandates

Over

20000

free document reviews

Over

22000

free initial consultations

Over

2000

answered forum questions

Principles

Kostenfreie anwaltliche Erstberatung
Kostenfreie anwaltliche Erstberatung in Ihrer Angelegenheit und Ersteinschätzung Ihres Falls – BUNDESWEIT.
Schnell & einfach
Wir kümmern uns um Ihren Vertrag – Sie konzentrieren sich alleine auf Ihr Geschäft. Eine Wartezeit oder lange Bearbeitungsdauer sehen wir nicht vor.
Rechtssicherheit
Ihre Rechtssicherheit steht für uns an erster Stelle. Wir erfüllen den anwaltlichen Vorbehalt der Rechtsberatung (§ 2 Abs. 1 RDG) und übernehmen die volle anwaltliche Gewähr.
Preistransparenz
Wir begleiten Sie zu einem feststehenden Festpreis – ohne komplexe Gebühren oder indirekt umgelegte Kosten von Vermittlungsportalen.
Spezialisierung
Durch unsere Spezialisierung auf bestimmte Kerngebiete und den Verzicht auf alle anderen Rechtsgebiete bieten wir Ihnen eine besonders hohes Fachniveau zu einem verhältnismäßig geringen Festpreis.
Langfristigkeit
Die Beratung zu Ihrer GmbH-Gründung ist unsere Investition in eine langfristige Zusammenarbeit auf den Gebieten des Unternehmens– und Verbraucherrechts.

Do you have a general question about “holding formation”? We answer them here for free!

Enter your question here

Erbschaft

13 Aug 2024/0 Kommentare/in Holding

Sehr geehrte Damen und Herren, meine Großeltern besitzen ein Haus welches im Todesfall an mich weitergegeben werden soll bzw. Ich Erben soll. Das ganze soll nach deren Wünschen so ablaufen, dass ich das Haus komplett bekomme ohne meine Mutter oder Tante auslösen zu müssen (Pflichtanteil). In weiterer Recherche bin ich dann auf eine Familien Holding […]

Weiterlesen →

06 Aug 2024/0 Kommentare/in Holding

Weiterlesen →

17 Jul 2024/0 Kommentare/in Holding

Weiterlesen →

03 Jul 2024/0 Kommentare/in Holding

Weiterlesen →

ERSTBERATUNG & PRÜFUNG

21 Apr 2024/1 Kommentar/in Holding

Sehr geehrte Damen und Herren, ich würde gerne durch Sie das Restaurant meines Vaters in eine Holding Struktur Umwandeln. Dafür würde uns interessieren welche Kosten damit verbunden wären und ob dies in unserem Fall einen Sinn machen würde. Ich freue mich von Ihnen zu hören. Mit freundlichen Grüßen Le Thi Pham Ngoc

Weiterlesen →

Seite 1 von 712 3 ›»

Unsere Mandanten vertrauen uns auch in folgenden Fachgebieten

What is a holding?

What is a holding?

What is a holding?

Gründungs-Kostenrechner

✔ CHEAP✔ FAST✔ LEGALLY SECURE

Download Documents

↪ or reserve a free initial consultation.

Examples of holdings

Example 1

Example 2

Subsidiaries of the holding

Forming a holding

The holding as a form of organisation

Advantages of the holding

Disadvantages of the holding

Variants of the holding

Investment holding

Operational holding

Financial or asset holding

Management holding

Organisational or structural holding

Hierarchy of a holding

✔ CHEAP✔ FAST✔ LEGALLY SECURE

Download Documents

↪ or reserve a free initial consultation.

Your formation team

Principles

Start your company now!

Personal Data

Contact details

Company Data

Founding Package

Do you have a general question about “holding formation”? We answer them here for free!

Enter your question here

Erbschaft

ERSTBERATUNG & PRÜFUNG

FIRMA GRÜNDEN

MARKE SCHÜTZEN

BEWERTUNG LÖSCHEN

AGB ERSTELLEN

FIRMA FINANZIEREN

RECHTSTEXT ERSTELLEN

DATENSCHUTZ EINHALTEN

MITARBEITER EINSTELLEN

BUCHHALTUNG AUSLAGERN

FIRMA BEENDEN

Schnellnavigation

Insolvenzrecht

Unternehmensrecht

Mitgliedschaften

Kontakt

Social Media

Hinweis

FIRMA
GRÜNDEN

MARKE
SCHÜTZEN

BEWERTUNG
LÖSCHEN

AGB
ERSTELLEN

FIRMA
FINANZIEREN

RECHTSTEXT
ERSTELLEN

DATENSCHUTZ
EINHALTEN

MITARBEITER
EINSTELLEN

BUCHHALTUNG
AUSLAGERN

FIRMA
BEENDEN