📅 2026 Update: Important Changes for Holding Companies

Since the original article was written, there have been key updates related to holding companies that business owners should know. These changes affect accounting methods, business formation processes, and CPA licensure. The earlier article continues further down the page and covers foundational topics about holding companies.

📊 Accrual Basis Accounting Requirement

Starting in tax year 2026, certain businesses must use the accrual method for federal tax purposes. This includes C corporations, partnerships with a C corporation as a partner, and tax shelters with average annual gross receipts over $32 million. Under this method, income is recorded when earned and expenses when incurred, rather than when cash is received or paid.

  • 💼 Implication for Holding Companies: Holding companies that exceed the gross receipts threshold will need to transition to this accounting method, impacting their financial reporting.

⏳ Business Formation Processing Times

Processing times for forming a business can vary significantly by state. Typically, it takes from a few days to several weeks, depending on whether you file online or by mail. This is important for businesses looking to establish a holding company quickly.

  • 🚀 Action Point: Check your state's requirements for processing times to plan your business formation effectively.

📅 Reporting Deadlines for Changes

Businesses must report changes in the responsible party using Form 8822-B within 60 days. This form must be mailed to the appropriate address provided on the form.

  • 📬 Responsibility: Holding companies should be mindful of this deadline to ensure compliance and avoid potential penalties.

🧾 CPA Licensure Updates

In Minnesota, as of January 1, 2026, there are multiple pathways to obtaining CPA licensure. This creates more options for those interested in the accounting field, which can be beneficial for holding companies needing financial oversight.

  • 🧑‍🎓 Benefits: Access to a wider pool of CPAs can enhance financial management for holding companies.

📌 Key Takeaways

  • 🔑 Accrual method is now required for larger businesses.
  • 🗓️ Business formation processing times vary by state.
  • 📅 Report changes with Form 8822-B within 60 days.
  • 🎓 Minnesota offers new pathways for CPA licensure.

💡 Tips for Holding Companies

Review the specifics of your situation with your attorney. Understanding your unique business needs is key.

📋 Understand the Accrual Method

If your holding company has gross receipts over $32 million, you must use the accrual method for accounting. This affects how you report income and expenses.

⚖️ Choose the Right Business Structure

Selecting the proper legal structure is vital. Holding companies often choose LLCs or corporations for liability protection and tax benefits. Each structure has different implications for taxes and personal liability.

📜 File for an EIN

Most holding companies need an Employer Identification Number (EIN) for tax purposes. This number identifies your business and is necessary for opening bank accounts and hiring employees.

📅 Stay on Top of Reporting Deadlines

Timely reporting of changes in your business is crucial. Use Form 8822-B to report changes in the responsible party within the required 60-day period.

💼 Consider Local Permits

Depending on your location, your holding company may need local permits to operate legally. Research your local regulations to ensure compliance.

🏆 Top Services for Holding Companies Ranked by User Reviews (2026)

This section covers services that help with business formation, compliance, and legal needs, vital for holding companies. The rankings are based on Trustpilot data from October 2026. Scores can change based on new reviews, and ratings are just one aspect to consider when evaluating these services.

🥇 1. LegalZoom

LegalZoom has been rated 4.6. It is known for its business formation services, estate planning, and intellectual property registration. However, some users report delays in customer support response times.

🥈 2. Bizee

Bizee holds a rating of 4.8. It specializes in business formation, registered agent services, and compliance services. Users have mentioned occasional issues with the user interface, but overall satisfaction remains high.

🥉 3. Rocket Lawyer

Rocket Lawyer has a score of 4.5. This service provides online legal services, document preparation, and legal advice. Some reviewers find the subscription model less cost-effective for those who need services infrequently.

4️⃣ LawDepot

LawDepot has been rated 4.0. It is recognized for its legal document creation, including business formation documents. However, some users have reported challenges with document customization options.

5️⃣ ZenBusiness

ZenBusiness has a rating of 4.8. This service is known for business formation, registered agent services, and compliance services. Some customers have experienced delays in processing times, but the overall feedback is positive.

🆓 Free Government and Nonprofit Help

The Small Business Administration (SBA) offers free business counseling and resources for entrepreneurs. Additionally, the IRS provides resources to help new business owners understand their tax obligations.

🔎 What to Compare When Choosing Services

  • 📝 Service offerings: Check for business formation and compliance services.
  • 🔍 Customer reviews: Look for service ratings and user experiences.
  • ⏳ Processing times: Understand how quickly services can complete your tasks.
  • 💵 Pricing: Compare costs for various services and any hidden fees.

❓ Frequently Asked Questions

❓ What is the purpose of a holding company?

A holding company primarily exists to own shares of other companies. It helps manage investments and can provide liability protection for its owners.

📝 How do I form a holding company?

To form a holding company, choose a legal structure, file the necessary documents with your state, and obtain an EIN. Ensure that you comply with all local regulations.

📊 What are the tax implications for holding companies?

Holding companies may face different tax rules based on their structure. They might be taxed at corporate rates if structured as a corporation, affecting how profits are distributed.

🚫 Can a holding company operate without a physical office?

Yes, a holding company can operate without a physical office. Many holding companies function entirely online, managing investments and subsidiaries remotely.

📈 What types of businesses can a holding company own?

A holding company can own various types of businesses, including LLCs, corporations, and partnerships. This allows for diversified investments and risk management.

🔄 How can I change the responsible party for my holding company?

To change the responsible party, complete Form 8822-B and submit it within 60 days of the change. This ensures the IRS has updated contact information for your business.

⚖️ Recent Cases Involving Holding Companies

Recent court rulings have addressed various issues related to holding companies, including tax disputes and liability cases. These rulings can impact how holding companies operate and manage their investments.

Explore more rulings on the news page to stay informed about recent legal developments that may affect your business.

End of October 2026 Update





When an individual considers a business or a company, he/she will generally imagine an entity that produces and sells certain goods. Companies are usually recognized as agencies that offer consumers specified goods and services. It is through selling these goods and services that a company is able to acquire a profit. However, not every company operates in this manner.

A holding company is a type of company that functions to control another business by obtaining extensive stocks in that business. In opposition to the widely accepted notion of a company, holding companies do not create or sell any products. Instead, these companies focus solely on managing other business entities. In regard to investment, holding companies often offer very attractive investment opportunities.

In the United States, stocks frequently equate to power. When an individual purchases stock in a company, he/she usually acquires voting rights within that company. In most cases, consumers acquire little voting power in a company because they only own a small number of stocks in that company. If an individual obtains an extensive quantity of stock in one company, he/she will acquire an important voting presence within the company.

Purpose of A Holding Company

People who purchase large quantities of stock in a company can play an important role in developing the business policies of that company. Holding companies function under the same principle. These companies will obtain the majority of a company's stock. Subsequently, the holding company will have the ability to control the policies and decisions of that business entity due to its significant voting power.