Holding company structures have advantages and disadvantages. But, overall they can provide strong

I'm sure you've heard about how large corporations have holding companies or parent companies, and then underneath it they have subsidiaries. So I'm going to quickly try to explain the strategy and the point of doing this. So holding companies are sometimes also called umbrella companies or parent companies, and their sole role is to not do any operations. They're only supposed to hold the subsidiaries underneath them, which means that they're going to own the LLCs underneath them. These LLCs that are underneath the holding company are called operating companies. So basically, the holding company is just there to own the operating companies, but to also own the operating company's assets, such as cars, machineries, or intellectual property. Oftentimes, because the holding company is owning these assets, they will then lease the assets back to the subsidiary companies. Overall, the purpose of these structures is to provide tax benefits and an extra layer of personal liability protection for the owner of the holding company. Therefore, if one of the subsidiaries gets into legal or financial trouble, then you as the owner of the holding company will be much more protected. Another benefit is that if one of the subsidiaries gets into financial or legal trouble, then the other subsidiaries won't be impacted.