Business structuring

Most businesses in the UK start life as a sole trader or a Limited company. In the early stages of a business, this is normally appropriate, but as your business grows, you should consider whether a review of your structure is needed.

We’ve helped numerous business owners to set up corporate group structures, to separate different trades into their own entities, or to incorporate SPVs for investments in property or other ventures.

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As your business evolves, so should your financial and legal structure

Most restructures begin by setting up a corporate group. This structure is commonplace in larger businesses, but is less frequently used in SMEs. But adding a group structure allows your business to develop in other ways, such as:

  • You can protect valuable assets, such as intellectual property or machinery, by moving them into a separate asset holding company, which then leases or rents the assets to other companies within the group
  • A holding company can be used to protect your cash assets, separating them from the risks associated with your trading business
  • You can use a group structure to tax efficiently grow your family wealth, by allowing you to reinvest the profits of your business within the group in other activities, such as property investment
  • Multiple subsidiary companies can be used to separate different trades, which is particularly relevant where different functions of the business need to operate separately
  • Investors can be introduced at different levels within a group structure, so you have the choice to raise investment across the whole group, or targeted at a specific subsidiary venture. The same approach is true for employee share schemes, which can be used to incentivise your team members.

You can download our detailed briefing on business structures and asset protection here, or get in touch with a member of the Folio Partners team here.