Holdings

Holdings first appeared in the late XIX-early XX century as a result of the prohibition of the trust systems with the “Anti-trust legislation” in the USA. The number of provinces adopting this system had already reached 30 in 1929. Following the USA, such formations became legal consecutively in France, England, and Germany.  

This system gained significance in Azerbaijan after the 1990s. It is worth noting that in the Soviet period there were “state holdings” here, which were accepted as a form of holdings in the world. 

Semantically, holding is derived from the English word “to hold”, which means to keep, bring together. Holding is the participation form of the company, or joint-stock company that holds the shares of the companies with the majority voices and without the need of complete union of the companies that form the union for the common group interest, in a form that has a say in one or several sub-joint-stock companies and offices, i.e. it implies the purchase of the sub-companies’ shares by the share-holding company and its active position in the management council. The main objective of the holding is to gain economic integrity- economic power. 

Holdings help to develop the investment exchange by paving the way to the formation of large companies.

The greatest benefit of the holdings to the state economy is their great role in the creation of new jobs.

Holdings may support the effective use of state resources by utilizing new production technologies.

The large companies formed as a result of holdings gain competition power with the international companies, thus, increase the image of the country in the international arena and increase the currency profits of the country via the capital investments in the foreign countries.