What is the difference between Holding and parent company?

We find in the law and jurisprudence of the French term parent company (Societe mere), which owns half of a capital company, or full shares. The parent company has several of the most important characteristics of it: 1. that the parent company is a public company owns all the shares of a public company again, or at least 50%. 2 that the goal of this work is the control of the parent company to its subsidiary in terms of management. 3 that the parent company is a company that manages affiliate by a committee appointed by the Board of Directors of the parent company, and the company's preparation of its annual budget and final accounts and in accordance with the provisions of the Companies Act, and submitted to the General Assembly of the parent company

A holding company is, by definition, a parent company.

 

A parent company is simply a company, trading or otherwise, that holds the majority of shares in another company.

 

The term 'holding company' is normally used in respect of a company set up for the sole purpose of holding shares in other companies, usually to facilitate formation of groups and reorganisations. ie they tend not to have any business of their own, but there is nothing to prevent them doing so.

 

In short, 'parent' can be a legal definition, and 'holding company' usually infers a non-active parent but in the general sense the terms are interchangeable.

A parent company is "the original flagship" which has givenrise to other businesses. If they retain more than51%shares then it is a parent company AND a holding company.A holding company is one which holds51% share. But it maynot be the parent company i.e. it may have got the sharesthrough acquisition. 

While no significant legal differences exist between a parent company and a holding company, the legal implications as to the status of the company is usually different. Generally, a holding company is inactive except for the purpose of holding other companies. A parent company, however, typically has its own business ventures and purchases its subsidiaries for investment purposes or to aid in its own operations.

A parent company need not be a Holding company.  A Holding company holds51% or more of the Equity share caiptal of a Subsidiary company and control the affairs with  upper hand.  A parent company can promote a Subsidiary even  without  required  controlling stake in its Equities and voting rights later on.

A holding company is inactive except for the purpose of holding other companies. A parent company, however, typically has its own business ventures and purchases its subsidiaries for investment purposes or to aid in its own operations.

We usually consider a parent company when a major company is located in one country and has subsidiaries spread all over the world. these subsidiaries are usually agents that sell and promote the products of this parent company. Usually food companies depend on what we call franchise agreement with people from different countries. these franchise contracts forces these restaurants for example to abide by all the regulations of the parent company starting from the restaurant's design, reaching the menu and the employees.

While a holding company is totally different. It is a company that focuses on purchasing shares in different companies from around the world and build a certain portfolio of shares. Holding company cannot run business itself and carry trade operations. Instead it will be controlling other companies and support them with money, loans if needed. It is very familiar today to create holding companies especially on the international business arena. This company can be part of the administration of a certain company.

 

this is in brief the difference between the two.