Setting up a Subsidiary company
What is a Subsidiary Company?
A subsidiary company can be simply defined as a company that is either owned or owned in part by another company (holding shares 51% or more). The company that owns the subsidiary is known as a parent or a holding company. The subsidiary is a separate legal entity from its parent company.
Companies Act 2006 definition of a subsidiary.
How to set up a Subsidiary Company
A subsidiary company is set up the same way you would for a regular company, and it may be partly owned or entirely owned by another company.
You can incorporate the subsidiary company via Company Formation MadeSimple, you will need at least one director,a UK registered office address, a service and residential address for the director. The service address is what will be shown publicly.
Because you are setting up a subsidiary, you will need to appoint an individual and another company as a shareholder, i.e the parent company.
Should I set up a Subsidiary Company?
A few reasons if you're thinking about setting up a subsidiary company:
- You operate overseas - this could be beneficial for tax purposes.
- Two different businesses - you may have two business which is different in terms of objectives and so setting up a subsidiary is a separate legal entity from its parent company.
- Limited liability - since the subsidiary is a separate legal entity, the assets of the parent corporation are protected if the subsidiary goes into debt - SPVs are typically subsidiaries.
This article is a general overview, and so we recommend