Advantages of a holding company

A holding company is a company legally holding (owning) shares of other companies. Usually it is an LLC or LP holding enough capital shares of another company in order to control and manage its activity and profits. A holding company as such is often used only to control other business structure: it may be a corporation, LP or LLC, rather than producing its own goods or providing services. Holding companies may also be used to own some kind of property. Holdings are often used as owners of real estate, intellectual property rights, stocks and other assets. In case a company is fully owned by a holding company, it is called a subsidiary company.

Purpose of a holding company
One advantage of having a holding company is that the holding company’s assets are very well protected against losses, claims and other risks. In case one of the companies is insolvent, the holding structure will have a capital loss and a reduction of net worth overall, however, the insolvent company’s creditors cannot claim assets of the holding company in the litigation. So, a big business structure can be organized in a form of holding with just one subsidiary in order to own its IP rights, or, alternatively, to own real estate property, or, to own equipment, or to conduct business as a franchise. By constructing such complex several-layer holding structure, each daughter company among with the parent company itself are having a quite limited financial and legal responsibility, which makes it a good solution for asset protection. Making holding corporate structure may also decrease tax liability, which can be achieved by incorporating some parts of the company in jurisdictions with decreased or exempted taxes.

Holdings also allow private persons to protect their income or assets. Instead of owning assets personally and bearing full responsibility for one’s debts, possible lawsuits and other risk factors, holding structure can hold the assets instead, thus, putting only holding company’s assets at steak.

Main activities of a holding company include supervising the subsidiary companies it owns. It can recruit and fire staff, if required, however, managers of the subsidiaries will be held responsible for their decisions regardless. Even though the parent company does not manage daily operations of the subsidiaries, the holding shareholders should have a picture of what is going on and how these subsidiary companies work in order to evaluate the performance and financial data.

Benefits of having a holding structure
In addition to everything previously mentioned, there are other major benefits of having a holding structure.

Full operational control over all subsidiaries:

A holding company has full supervision and control over directors’ board of the subsidiary. Parent company has the authority recruit staff, including directors.
Can be used to own property:

A holding company can hold different types of property, including, but not limited to real estate and intellectual property rights as well as other assets.
A holding company can not only hold, but also utilize and even pledge it’s property as well as invest it.
Risk minimization:

Holdings are often used to own assets, thus usually such structures are owners of numerous valuable assets.  Holding corporate structure provides legal opportunity to protect these assets from claims, damages, lawsuits and other risks.
Holdings can be organized in several different ways. This allows quite flexible asset distribution between all subsidiaries.
Holdings company can own and use property:

Putting your company’s intellectual property rights or any other assets into a holding structure may be very beneficial in terms of legal protection against potential risks.
Flexibility of participation in risky investment projects:

A holding company participating in high-risk investment projects can protect shareholders of a daughter company.
Board of directors of each of the companies must act in the best interests of their company:

The parent company and its subsidiaries are recognized as separate legal entities each, each having separate board of directors. The board of directors is liable for the company’s activities as well as they are bound to act in the best interests of the represented business.
Tax planning solution:

The holding structure may be set up entirely in a different jurisdiction, which offers decreased or exempted taxes.
The holding can be quite a beneficial structure, especially considering that it often has lower tax rates than a trust would usually have applied.

Types of audits

Most common types of audit services include:

External audit (statutory audit)

These are the most widely used audit services. Examination of the accuracy of the financial statements is entrusted to external and independent auditor, who cannot be connected to the company or have any interest in the outcome of audit (no conflict of interests). The annual financial statement is certainly the main resource of accountability of the company. Since the financial statement is prepared and approved by the board of the directors, the shareholders of the company would rely on the external way to verify the report. Therefore, they invite external auditors. Moreover, regulations of many countries prescribe to run statutory audit on annual basis;

Internal audit (operational audit)

This is a voluntary pocedure of the organisation, willing to examine the effectiveness of inner control, verify and monitor possible fraud, check financial data, examine operational process and other activities. Basically, any company may conduct it for its own sake;

Tax audit

Tax audits are performed by tax authorities within regular intervals in some jurisdictions or in other randomly chosen countries. The purpose of the tax audit is to check company’s tax liabilities and to analyse accuracy of the filed tax returns;

Forensic audit

This is a special investigational audit conducted by legal officers and is often used in courts and investigation processes in order to determine frauds, tax evasion cases, money laundering and other illiegal actions within the framework of the company or its responsible officers.

 

 

 

Website applications for business

A corporate website can have various purposes, performing a number of internal and external functions to help boost the success of your business. Internal functions are related to the actions users take when already on the website, while external functions serve to bring clients to the site, i.e. they are related to how the website appears on other portals, such as search engines.

Internal business functions

Internal business functions relate to how your corporate website presents information to users and guides them towards conversion, i.e. the moment when a user becomes a (potential) client by ordering something or contacting the company. This is achieved through the use of web design tools, such as content layouts, call-to-action elements, landing pages and many others. A quality website ensures that a potential client is easily able to find what he or she is searching for, and is then guided towards making a purchase or placing an order.

Another important function is to create a pleasant general user experience. A user is more likely to want to become a client if he/she enjoys the website in general. This is also linked to the fact that an abundance of interesting product-related information makes clients feel a lot more confident about their actions — they feel that in purchasing your product they are making a well-informed choice, which, again, increases the likelihood that they will actually want to buy it.

External business functions

A website’s external business functions relate to how potential clients are drawn to the site, before they have had a chance to see what it contains. This is a particularly important task, as if a client does not enter the website, he/she cannot use it to make a purchase or carry out any other kind of interaction. Websites achieve this goal by optimising their content in such a way that makes it visible to search engines and ensures that whatever the user sees is relevant and attention-grabbing, encouraging them to visit the site.

There are many additional ways to ensure that your company website attracts the interest of potential clients, most of which are linked to the amount of additional information displayed in search engines — maps with your address, illustrations from the website, a list of the site's sub-sections, etc. The more abundant this information, the more trustworthy the company looks; this is achieved by careful manipulation of the website’s content, so that search engines deem it worthy of such a detailed description.