An operating company is a business entity that engages in regular commercial or business activities, providing goods or services as part of its core operations. Unlike a holding company, which primarily owns stakes in other companies without directly producing goods or services, an operating company is involved in day-to-day business functions such as production, sales, marketing, and customer service.
In many corporate structures, an operating company is responsible for generating revenue through its direct business activities. It might manage assets, employees, and other resources necessary to execute its business model. An operating company may be a subsidiary of a larger parent company or part of a group of companies in which a holding company owns the shares but leaves operational control to the operating entities.
For example, in real estate, an operating company might manage and develop properties, while a related holding company owns the assets and shares in the operating company.
