corporate hierarchy

corporate hierarchy

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Hi Forum

Could anyone enlighten me on why several companies are used in a corporate hierarchy when say a new investment group buys a UK trading company. I notice that lots of buyers have about 3 or 4 holding companies between them and the target, each doing no more than holding the shares in the company below. Then they seem to make losses. I was wondering how do they get any dividends to the investors when each of them have negative retained earnings?

Any takers? from the corporate finance world perhaps?

Thanks all.

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By geroge
23rd Dec 2014 18:16

Many reasons, tax, separation of different trades, holding intellecutal property etc.

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