A pure holding company is an entity that exists solely to own shares or equity in other companies. Its primary function is to hold controlling stakes in one or more subsidiary companies without engaging in any business operations of its own. The pure holding company doesn't produce goods or provide services; its income is typically derived from dividends, interest, or capital gains generated by its ownership of these subsidiaries. This structure is often used for tax advantages, risk management, and centralizing control over diverse business interests.

In contrast, a mixed holding company serves dual purposes. It not only holds shares in other companies but also engages in business activities of its own. A mixed holding company might operate in an industry while simultaneously controlling or owning subsidiaries in different sectors. This allows the company to generate revenue from its business operations in addition to its investment activities.

The key difference lies in their scope of operations: a pure holding company focuses strictly on investment management, while a mixed holding company is involved in both business operations and holding investments. This difference impacts the company’s structure, tax considerations, and risk profile, as a mixed holding company may face more operational risks compared to a pure holding company.