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A holding company is a type of business entity that primarily exists to own and control other companies' stocks, typically operating in various industries. Instead of engaging in day-to-day operations, a holding company oversees its subsidiaries, often providing strategic direction and financial management. The primary purpose is to manage assets, mitigate risks, and facilitate efficient resource allocation among its subsidiaries. This structure enables a holding company to diversify its investments, minimize liability, and optimize overall corporate governance. By holding controlling interests in multiple entities, a holding company can achieve synergies, economies of scale, and strategic alignment across its diverse portfolio.