What are the Benefits of Setting up a Holding Corporation?

A holding corporation is a type of corporation that exists solely for the purpose of owning other companies, assets, or investments. Here are some potential benefits of setting up a holding corporation:

  1. Limited liability protection: Like other corporations, a holding corporation provides limited liability protection for its shareholders. This means that the personal assets of the shareholders are generally protected from the liabilities of the corporation.
  2. Tax advantages: A holding corporation may be able to take advantage of tax benefits such as deferral of taxes on capital gains and dividend income, as well as the ability to offset losses against gains.
  3. Centralized management: A holding corporation can provide centralized management of multiple companies or assets, which can lead to greater efficiency and consistency in decision-making.
  4. Simplified ownership structure: If you own multiple businesses or assets, a holding corporation can simplify the ownership structure by allowing you to own them all through a single entity.
  5. Asset protection: By placing your assets in a holding corporation, you may be able to protect them from potential creditors or lawsuits.

However, it is important to note that the benefits of a holding corporation will depend on your specific situation and goals. It is recommended that you speak with a lawyer and/or accountant to determine whether a holding corporation is right for you. If you require any assistance, you may contact our business lawyers at 1-877-892-7778 or info@falconlawyers.ca.

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