QUESTION
Is my main company a parent company or a holding company?
Asked on Apr 07th, 2018 on Business Law - Pennsylvania
More details to this question:
I am trying to put all of my businesses under one company. The what my main company will do is have the profits from the subsidies flow up to it and want loan money back out to those businesses. I want to buy and sell businesses though my main company. And lastly can I build business credit for a holding company?
1 ANSWER
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I don't think there's any legal or practical difference between the labels that you put on any of the companies. Any company can be extended credit by a lender if its deemed credit-worthy. Most lenders will require a pledge of collateral in return for a loan so if the "holding company" has no assets, you might be required to pledge assets of other companies and/or personally guarantee the loan.
Answered on Apr 18th, 2018 at 11:54 AM