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Definition of 'Opco'

An operating company (Opco) is a company that is responsible for the day-to-day operations of a business. Opcos are typically responsible for generating revenue and profits, and they may also be responsible for managing assets and liabilities. Opcos are often contrasted with holding companies, which are companies that own other companies but do not have any day-to-day operations.

There are a number of reasons why a company might choose to have an Opco. One reason is to separate the business's operations from its ownership. This can help to protect the business from liability in the event of a lawsuit or bankruptcy. Another reason is to allow the business to raise capital more easily. Opcos can often be more attractive to investors than holding companies, because they are more likely to have a clear path to profitability.

Opcos can also be used to structure a business in a way that minimizes taxes. For example, an Opco can be used to hold foreign assets, which can help to reduce the amount of taxes that the business pays.

Opcos are a common feature of many businesses, and they can play an important role in helping businesses to grow and succeed. By separating the business's operations from its ownership, Opcos can help to protect the business from liability and make it more attractive to investors. Opcos can also be used to minimize taxes.

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