Basic structure

A basic corporate structure commonly consists of a holding company with a number of subsidiaries which may be operating or holding subsidiaries. Operating subsidiaries are subsidiaries which operate a business within a particular field or geographical region. Holding subsidiaries are subsidiaries which do not conduct any business but merely hold shares in one or more operating subsidiaries. The assets required to conduct such business are ideally held by the holding company or by holding subsidiaries. However, often transaction costs, including capital gains tax, prevent the moving of assets to appropriate locations so alternative asset protection strategies need consideration.

See Basic structure.