A holding company is a type of business entity that primarily exists to own shares in other companies. It does not produce goods or services itself but instead manages and controls its subsidiaries, which are the companies it owns. This structure allows for centralized management and can help reduce risk by separating different business operations. Holding companies can provide financial benefits, such as tax advantages and easier access to capital. They can also facilitate mergers and acquisitions, allowing for strategic growth. Examples of well-known holding companies include Berkshire Hathaway and Alphabet Inc., which own various businesses across different industries.