Setting up Subsidiary from UK

The Soup Dragon

I would be keen to know peoples thoughts about this from the point of view of doing it as a separate company ie sister company own by directors or as a subsidiary own by parent company?

Mick Tator

Nowhere near enough info there to advise - tax position, creditor viewpoint, bank lines,mgmt structure, etc., etc., You need to talk to your accountant.

dave3t

When deciding between establishing a sister company or a subsidiary, consider the following:

Sister Company

• Independent Structure: Operates independently, which can offer flexibility and a distinct brand identity.
• Liability Protection: Risks are contained within the separate entity, protecting the parent company's assets.
• Management Autonomy: Directors can make independent decisions, which can be beneficial for innovation and adaptability.

Subsidiary

• Control: The parent company maintains greater control over operations and strategy.
• Shared Resources: Potential for shared resources, such as marketing or HR, leading to cost savings.
• Brand Leverage: Can benefit from the parent company’s reputation and customer base.

Considerations

• Tax Implications: Explore how each structure will impact your tax situation. Subsidiaries may benefit from consolidated tax filings.
• Regulatory Compliance: Both structures require compliance with local laws, but subsidiaries may face additional scrutiny.
• Future Goals: Consider long-term goals—whether you plan to sell the new venture or keep it as part of your overall strategy.

Ultimately, the decision should align with your business goals, risk tolerance, and operational strategy. Consulting with a legal or financial advisor can provide tailored insights for your situation.