eignarfélag

Eignarfélag is an Icelandic term that translates to "holding company" or "ownership company." It refers to a legal entity whose primary purpose is to own shares or other ownership interests in other companies. These subsidiary companies are often referred to as the "eignarfélag's" assets. The holding company itself typically does not engage in active business operations, such as manufacturing or providing services. Instead, its function is to control and manage its investments in other businesses.

The structure of an eignarfélag can vary. Some may hold a majority stake in their subsidiaries, giving them significant control over management and strategic decisions. Others might hold minority stakes, acting more as passive investors. The formation of an eignarfélag is often motivated by a desire to consolidate ownership, facilitate mergers and acquisitions, or achieve tax advantages. It can also be used to separate financial risk, as liabilities incurred by subsidiary companies may not directly affect the holding company.

In Iceland, eignarfélög play a significant role in the corporate landscape, particularly in larger business groups. They are subject to Icelandic company law and reporting requirements. Understanding the concept of an eignarfélag is crucial for comprehending the ownership and control structures of many Icelandic businesses.