How to start a holding company

Consider your needs. The main value of a holding company is that it can protect assets and gain influence over other companies, so there are only specific times when starting a holding company is necessary.

You should begin by evaluating your current business' or company's needs. As has been stated, if you find you are in need of asset protection, a holding company is a good choice.

You might also want to create a holding company for tax benefits. If you develop an operating company, and then a holding company, you can also shield the holding company from the debts of your operating company.

Register your holding company. To start a holding company you need to register it in your state. You will have to provide your business name and articles of incorporation, as well as the name of the business agent managing your operating company and holding company.

You can also choose to be the business agent for both your operating company and your holding company.

The articles of incorporation delineate the purpose of your company and include a list of officers. You must also indicate the method or technique by which business-based decisions will be decided.

The creation of a bank account is also necessary for this step. This account needs to be unique and solely tied to your holding company. You must be sure to have separate bank accounts for both your operating company and your holding company. Keeping track of these bank records must also be done separately.

Deposit your assets into your holding company. Once you have registered your holding company and have gotten a bank account solely for it, you can now deposit your assets into the holding company.

This means that the profit your operating company generates is then put directly into the holding company. Once this is done, the money in the holding company may be given or lent to the operating company at times of necessity.

If your operating company exists prior to the forming of your holding company, you can make a sale of your operating company's assets to your holding company to protect those assets.

You can then aim to diversify the portfolio of your holding company by investing in or acquiring equity in other companies or businesses when these opportunities present themselves.