How can I incorporate a subsidiary?
You may be under the impression that it's difficult to set up a subsidiary in the UK, however, this isn't the case. This guide will walk you through the process and help you understand whether it's right for you and your business.
What is a subsidiary?
First off, let's look at what a subsidiary is. It is a company that is either owned, or part owned by another company. The company that owns the subsidiary company is known as a parent or holding company. Note: There are some differences between a parent and holding company, we won't go into these here though.
How to set up
It's worth remembering that although the subsidiary is owned by another company it will be trading in a different way and doing different things. Because of this, you need to incorporate it in its own right.
When forming a company with us, it is really easy to create the subsidiary; this is done through ticking a box. Then you can proceed with the form as you would for any other registration.
You still need to have a sole director, which cannot also be the company secretary. Note: There is no requirement to have a company secretary but some directors choose to appoint one.
You must have a director even though the company is owned by another company. The company cannot have sole ownership.
Changing the structure
Like with any other company, you are able to change the structure after incorporation. You can have it so that there is more than one company owning the company, or you can even have it so that the company is trading on it's own without any parent companies.
Is a subsidiary the right way to go for my business?
There are no set ways that you should be running your business. That is up to you. However, there are some instances in which you must think about setting up a subsidiary. These are:
- You are Operating Overseas Foreign companies can opt to set-up a subsidiary company in the UK if their main company is based overseas.
- Two Different Businesses Sometimes you may have different arms of your business that you want to have separated. Such as a new arm of the business under different branding (although this doesn't have to be the case).
- Team Differences Some companies create a subsidiary if they have a team working on a different project, not relevant to the business' primary purpose, at another office.
This isn't a decision you should take lightly and it isn't always the best way forward for a business. However, if you have done your research and feel it is the way to go for you and your business then you can set-up through us.
Don't forget, Company Wizard are here to help with your company queries and changes through our online portal. So, if you need a bit of guidance with your incorporation, please get in touch.
- 06 Jan 2021 - Planning for Shareholder Exits
- 17 Dec 2020 - How Do Management Companies Make Decisions and Manage Disputes?
- 10 Dec 2020 - Becoming a director of a management company
- 24 Nov 2020 - Are Directors and Shareholders Liable for Company Debt?
- 06 Nov 2020 - Can My Company Make Contributions Towards My Pension?