system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: What is a HOLDINGS company and how does it work?

Is it the same as LLC? I don't know that too. I did my fair share of googling, but I still do not get it. Please someone help and explain it to me like a toddler. Much appreciated.
gpt
A Holding company is a business entity that doesn't produce any goods or services. They own a controlling stake in smaller (subsidiary) businesses that do produce something (operating companies). The Holding company keeps all the money used to invest in the operating companies (assets). The operating companies keep all the liabilities (taxes, lawsuits, etc) of operating a business. It is hard to sue the holding company instead of the operating company.