√ Definition of Holding Company, Characteristics, Purpose, Strengths, Weaknesses, Process, Examples
Understanding Holding Company, Characteristics, Purpose, Strengths, Weaknesses, Process, Examples – In this explanation, you will learn about holding companies. Which includes the definition, characteristics, objectives, advantages, disadvantages, the formation process and examples of holding companies with complete and easy-to-understand discussion.
Understanding Holding Company, Characteristics, Purpose, Strengths, Weaknesses, Process, Examples
For more details, please see the review below.
Definition of Holding Company
A holding company, which in Indonesian is a holding company, is a company that is the main company that leads several companies gathered in one group company.
With the grouping of companies into a holding company, it is very possible for an increase or creation of the company's market value (Market Value Creation). The relationship between the parent company and the subsidiary company is Affiliation. Another definition of a holding company is a company whose purpose is to own shares in one or several companies and manage one or the other companies.
From the explanation above, it can be concluded that a Holding Company is a holding company that has shares in subsidiary companies or has a role as a shareholder.
Definition of Holding Company According to Experts
-
Hadori Yunus (1990)
The definition of a holding company according to Hadori Yunus is a company formed with the specific purpose of owning shares and controlling the operations of other companies. -
Bringham And Houston (2001:413)
The definition of a holding company according to Bringham and Houston is a corporation that has a sufficient number of ordinary shares of another company so that it can control the company. -
Winardi
The definition of a holding company according to Winardi is a company that controls other companies. -
Fuady (1999)
The definition of a holding company according to Fuady is a company that aims to own (control) shares in one or more other companies and/or manage (control) one or more other companies the.
Characteristics of a Holding Company
There are characteristics of a holding company, including:
- Having a parent company, namely the holding company itself
- Having subsidiary companies, namely business entities under it.
- Provide management of existing business in separate management
- Being the controller of the entire course of the business process in every business entity that has been controlled by shares
- The wealth obtained from the shares in the business entity will be controlled.
Holding Company Purpose
Holding company whose function is to be a holding company that has a role in planning, coordinating, consolidating, developing and also controls whose purpose is to optimize the performance of the company as a whole, including its subsidiaries as well its affiliates.
The advantages and disadvantages of holding companies
The advantages and disadvantages of a holding company can be divided into three, namely from a company perspective, from a company operational perspective and from a legal separation perspective.
- Aspects of corporate control, is to influence or control other companies, the holding company must have shares in the company with a size of 20% - 50%.
- Operational aspects of the company. Judging from the law, a holding company is separate between subsidiary companies and other companies. So, if one of the subsidiary companies fails, it will be closed with the success of other companies. However, the holding company remains responsible for its subsidiary companies.
- Legal separation. It is possible to create several similar companies in one holding company, for example insurance companies, banks and other financial institutions.
Holding Company Formation Process
In a holding company, there are several processes for its formation, namely:
-
Residue Process
In the residual process, the original company is broken down according to its own business sector. The split company will then become an independent company, and the rest (residue) of the original company will be converted to a holding company and will continue to control shares in the fractional company the. -
Full Procedure
In contrast to the residual process, the full procedure is executed when there are not too many breaks or firm breakdowns, but are still deep the same or related ownership is scattered among each company and without being concentrated in one company holding. -
Programmed Procedure
In this process, the creation of a holding company is planned at the start of the business. Therefore, the first company to stand in its group is a holding company. Then, each business that is run will be formed or acquired by another company, with the provisions of the holding company as a shareholder will be together with other parties to become partners business.
In this way, the number of new companies as subsidiaries will continue to grow in number, in accordance with the business developments of the related business groups.
Example of Indonesian Holding Company
Some examples of holding companies in Indonesia include:
- PT. Danareksa
- Hutama Karya
- Astra International
- Krakatoa Steel
- Japfa
- Salim Group
- Maspion
- PT. Pupuk Indonesia Holding Company
- PT. Semen Indonesia (Persero) Tbk.
- PT. Medco Energi Internasional Tbk.
- PT. Indonesia Aluminum (Inalum)
- PT. Bumi Resources Tbk.
Thus has been explained about Understanding Holding Company, Characteristics, Purpose, Strengths, Weaknesses, Process, Examples, hopefully can add to your insight and knowledge. Thank you for visiting and don't forget to read other articles.
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