Legal Definitions - holding

The term holding has several distinct meanings within the legal and financial worlds, depending on the context in which it is used.

• In the context of a court's decision:

  A holding refers to the core legal principle or conclusion that a court reaches on a crucial issue, which is fundamental to its final judgment in a case. It is the court's definitive answer to a key legal question that directly determines the outcome.

  • Example: In a product liability lawsuit, a court determines that a manufacturer is strictly liable for injuries caused by a design defect, even if the manufacturer exercised reasonable care in production. This ruling establishes a new standard for similar cases.

    Explanation: The court's declaration that the manufacturer is strictly liable for design defects is its holding. This is a pivotal legal determination that sets a precedent and dictates the legal responsibility of manufacturers in future product liability claims.

• In the context of property and commercial assets:

  A holding refers to any property, assets, or investments that are legally owned by an individual or an organization. This can encompass a wide range of assets, from real estate to entire businesses.

  • Example: A multinational corporation owns a chain of hotels, several manufacturing plants overseas, and a controlling interest in a software development company.

    Explanation: The hotels, manufacturing plants, and the stake in the software company all constitute the corporation's holdings. These are the diverse assets and businesses that the corporation legally possesses as part of its overall portfolio.

• In the context of securities ownership:

  A holding specifically refers to the quantity of a particular financial security, such as stocks, bonds, or mutual funds, that an individual or entity owns.

  • Example: An individual's investment portfolio includes 200 shares of a technology company, 50 units of an exchange-traded fund (ETF), and 10 municipal bonds.

    Explanation: The 200 shares, 50 ETF units, and 10 municipal bonds are the investor's specific holdings in securities. They represent the exact amounts of each financial instrument that the investor legally owns.