A holding company receives dividends from operating subsidiaries and, under s.80M of the Income-tax Act 1961 (as it stood for inter-corporate dividends), profits can park at the holding level while only what you need is distributed personally. Beyond tax, separate entities ring-fence liability and protect IP — a lawsuit against the operating company can't touch assets held in a separate IP or holding entity.

Owning trademarks and patents in a dedicated IP company lets you license them to operating companies for royalties. If the operating company fails, the IP survives — and the licence structure gives the group a repeatable royalty income stream. The builder's 'IP + Operating' and 'Full Group' presets show exactly this split.

Investors typically want a clean Pvt Ltd cap table. A holding company above the operating entity lets founders retain control of the HoldCo while diluting only the operating subsidiary — so the founder's ownership isn't eroded by operating-level dilution. This is the standard 'Founder + Holdco' preset in the tool.

Each entity carries its own ROC filings, audit, and tax returns — and group entities add consolidation considerations: the holding company must prepare consolidated financial statements under s.129 of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 where it holds a subsidiary. The tool's export lets you map the structure before you commit to the cost.

Each Pvt Ltd is incorporated separately under s.7 of the Companies Act 2013 via SPICe+, with the holding company subscribing to shares in the operating entities — allotment reported in Form PAS-3 within 30 days under s.39. Ownership percentages and control are then documented in the articles and shareholders' agreements of each entity. The builder plans the shape; a lawyer executes the papers.