<Table> <Tr> <Td> </Td> <Td> The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject . You may improve this article, discuss the issue on the talk page, or create a new article, as appropriate . (April 2016) (Learn how and when to remove this template message) </Td> </Tr> </Table> <Tr> <Td> </Td> <Td> The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject . You may improve this article, discuss the issue on the talk page, or create a new article, as appropriate . (April 2016) (Learn how and when to remove this template message) </Td> </Tr> <P> A holding company is a company that owns other companies' outstanding stock . A holding company usually does not produce goods or services itself; rather, its purpose is to own shares of other companies to form a corporate group . Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies . </P> <P> In the United States, 80% of stock, in voting and value, must be owned before tax consolidation benefits such as tax - free dividends can be claimed . That is, if Company A owns 80% or more of the stock of Company B, Company A will not pay taxes on dividends paid by Company B to its stockholders, as the payment of dividends from B to A is essentially transferring cash from one company to the other . Any other shareholders of Company B will pay the usual taxes on dividends, as they are legitimate and ordinary dividends to these shareholders . </P>

What is the purpose of a holdings company
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