A holding company is a company which owns other companies' outstanding stock. Holding companies refers to companies which do not itself produce goods or services, rather own shares of other companies. Holding companies allows for risk reduction for owners. Holding companies also allow the ownership and control of a number of different companies. Small to mid-size businesses have no need of holding companies. Holding companies receive dividends, interest or royalties, make investments in other companies and even finance investment undertakings by supplying the companies that they hold shares in with funds.