An ultimate holding company plays a key role in corporate structures, as it exercises control over other companies through board influence, management oversight, and policy direction—usually by holding a majority of shares. This structure allows for efficient decision-making and centralized control over subsidiaries.
Definition of an Ultimate Holding Company
Under Part 12 of the Companies Act, an ultimate holding company is legally defined as:
(a) A holding company of another company, meaning it has direct or indirect control over it.
(b) Not a subsidiary of any other corporate entity, meaning it sits at the top of the corporate hierarchy.
This means an ultimate holding company is the highest-level entity in a corporate structure, with no parent company above it.
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