A holding company usually starts with a good reason. Keep investment assets away from the risks of the practice. Keep the operating company clean in case it is ever sold. Hold property or investments in a separate box. Those are real reasons.

The problem is that a holdco charges you rent every year whether it is doing anything or not. Its own tax return. Its own accounting and legal bills. And the rules it was built under have changed. Since 2018, investment income inside a corporation over $50,000 a year starts shrinking the small business deduction, and the income splitting a holdco once allowed is mostly gone. A structure built before those changes may now deliver half of what it was designed for, at the same full price.

Here is the test I use. Can anyone, you, your accountant, your lawyer, say in one sentence what your holdco is for today? If the answer is that it has always been there, it has stopped earning its keep. Not necessarily a reason to wind it up. Moving assets out has its own tax cost, and sometimes the right answer is to keep it and give it a current job. But a structure nobody can explain is a cost with no plan behind it, and it deserves the same review you would give any other line item.