Sometimes companies are forced to group together, mainly for economic reasons, but also This grouping may be the result of an agreement that may seek to increase power over other Business. The concentration of companies from one or more industries under the same name, depending on the business form adopted by the companies, is classified as a cartel, trust or holding company.
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What is a corporate cartel?
The corporate cartel occurs when a company or a group of companies come together to control the production of the market temporarily. The main advantage of creating a business cartel is the reduction of the power of the competition, in addition, they have the power of production and over consumers.
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Control of an industry by a cartel does not mean that the cartel necessarily controls half of the market, but have greater power than other companies to set prices, and may even limit supply to increase Benefits.
What is the holding company?
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The holding company is a company that controls several companies, the most common form of creating a holding company occurs when a natural or legal person acquires shares in several companies.
The holding company benefits from tax advantages, since the tax burdens of several companies on the same account are lower than those of several accounts of different companies, these advantages increase if the physical headquarters of the holding is in a country called "tax havens".
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Many times, holding companies are formed by taking advantage of the real benefits that owning several companies with related activities can have.
What is a business trust?
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When several companies in the same sector or related activities that see their economic power diminished, legal or commercial, come together to create a new company under a single management, there is a trust. The trust could give rise to a monopoly, due to the control that the new company has over an industry.
Business associations can result in greater power in business decisions for member companies and the industry or industries in which they operate.
