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Holding Company Fundamentals in 4 Minutes

Updated: Jul 29, 2021

Ramone Preston here, founder and president of Ramone Preston University, the number one platform for ministry and marketplace training and the home of the blueprint game plans, I got a quick question that I want to answer that I've had posed to me a few times just within the last couple of days.

And the question is this how many businesses can you actually put under a holding company, and the easy answer as many as you want to.

As a matter of fact, there are international holding companies that have literally hundreds of businesses under them now. For me personally, as a consultant and coach, particularly in the area of business across the board, I recommend everybody to have a holding company. So let's just say you're starting a company. I would prefer you to start it as a holding company.

Now, there are a few legalities and logistics that you've got to make sure you understand. But for the most part, when you're filing your LLC or your C Corp or your S CORP, the corporate paperwork to file with the secretary of state, you just want to make sure that it's categorized and designated as a holding company. Now, there are some states this is what I found too, some states that don't necessarily have an option for you to specify or categorize or code of the LLC or the corporation as a holding company.

There are some states that actually give you a provisional option, but you can actually type that or use the language of a holding company in your operating agreement, which is kind of like the Constitution of your LLC. Let's just say you start a company, you want the first company to be the holding company because of course, it's going to "hold" all the other businesses, other interests and other companies, other assets, other intellectual properties, licenses, or whatever. The things are that you won't allow your own company to hold. So you have a holding company, number one, or legally speaking, it is LLC number one, which is operating as a holding company.

And then you're going to have other companies, whether you're starting another company that you're operating or a product or service, it's just going to be holding company or a holding company. No one that becomes the owner of LLC or company. Number two, it's going to be a holding company, No.

One that becomes the owner of an LLC or company number three, four or five beyond, beyond and beyond. Again, there are hundreds of companies that are under some of the larger international holding companies. So the answer to the question, which I'm always giving a long answer to a short question, the answer to the question, how many businesses can you have under your holding company is can you put as many as you possibly can.

So you just want to make sure that the first company is started and structured correctly, and you want to make sure that you're educated on how to run the day to day operations of that first holding company and how you continue to build it out, whether it's through divisions in the one holding company or through subsidiaries, which will be legal entities that are owned by the holding company.

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