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If you are interested in forming a holding company in the state of Florida, one of the first steps in the formation process is choosing an adequate name. The name you choose cannot be in use by another business and must include your company structure. So, you will need to decide on a business structure and perform an entity search at the Florida Division of Corporation’s website in order to successfully complete this step. This entity search is performed the same as if you were forming an LLC or corporation, as the name must be unique from all other entities in the state of Florida.

The Holding Company Structure

A holding company is a company formed for the purpose of owning other companies. Usually, the holding company itself does not perform any services or produce any goods. Instead, the holding company owns shares of other companies for the purpose of forming a corporate group. The holding company structure allows owners to reduce their risk while owning and controlling a number of companies.

When forming a holding company you can choose between implementing a corporation or limited liability company structure. The structure you choose will then be reflected in the name of your holding company. For example, if you choose a corporation structure, then your company will include some form of corporation identifier in the name, such as “Corp.” or “Inc.”. Similarly, if you choose a limited liability company structure, then your name will include a variation of “LLC” or “L.L.C.”. Apart from this, you are free to choose any suitable name for your holding company that is available for use in the state of Florida.

Holding Company Structure

Benefits of the Holding Company Structure

Risk Management: The holding company structure allows subsidiaries with riskier operations to be separated to limit liability. Important assets, such as real estate, equipment, trademarks, brands, and more can be owned by a single subsidiary to limit liability while remaining under the same ownership.

Transfer Ease: Holding companies provide the conditions for a simple sale to occur. Whether the subsidiary is a service or product line, it can be sold without entangling other assets, finances, or trade secrets of the holding company.

Patent Licensing: Patents and intellectual property can be reserved to a given industry. A holding company allows it to be licensed for a number reasons to multiple entities.

Tax Advantage: If your subsidiaries are fully owned, they can be treated as disregarded entities. So, while they enjoy limited liability and other safeguards, they do not require a separate tax return.

Benefits of the Holding Company Structure
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