Clive Owen LLP

Lee Watson, tax partner at Clive Owen LLP, is advising businesses that now might be the time to explore using a holding company, to protect business assets in these challenging times.

A key advantage to such a structure is to protect a valuable asset, which can be property as well as plant, machinery and vehicles. The assets held by the holding company are then potentially protected from the liabilities of the subsidiary companies.

For example, if a customer is unable to pay a large invoice this can lead to the business being unable to meet its liabilities and in a worst case scenario going into liquidation. If all the assets are in one company the liquidator can sell them to bring in cash to pay creditors. However if the assets are in a holding company they are potentially protected, as the liquidator should only be able to sell the assets of the trading company.

Other benefits of such a structure include:

• Potentially transferring assets around the group without immediate tax charges.
• It can be easier to sell off individual trades, in subsidiary companies. These are housed in separate subsidiaries.
• The business appears larger, which can help win bigger contracts with bigger organisations.
• There should be less risk in starting up a new venture within a holding company structure.
• Investment activities can be separated from trading activities.

Lee Watson, tax partner at Clive Owen LLP, which has offices in Darlington, Durham, Middlesbrough and York, said: “There’s not a simple answer when clients ask whether they need a holding company and although it does come with additional compliance costs, such as filing accounts and tax returns, there are many benefits that should not be disregarded.

“There are commercial and tax considerations to be taken into account so it’s important that the right advice is taken before considering a holding company structure, but it likely that many businesses will find it advantageous.”

ENDS

NEWS RELEASE: ISSUED ON BEHALF OF CLIVE OWEN LLP

CONTACT: Caroline Walker on 01325 363436

Notes to editors:

Clive Owen LLP are Chartered Accountants and Business Advisers.

The firm has 12 partners and 122 staff across four offices in Darlington, Middlesbrough, Durham and York.

It is an independent and commercially driven regional accountancy firm providing value added services to corporate, commercial, public sector and private clients.

Over the past thirty-seven years the firm has established itself as one of the largest and most trusted professional firms in the North East. This has been achieved by working closely with its clients to understand their needs and aspirations to ensure they achieve their financial goals.

Its services include:

Audit and Accountancy

Tax

Business Planning

Managed Services

Corporate Finance

Grants

It is a member of Kreston Global which is a worldwide network of independent accountancy and advisory firms.

Founded in 1971, Kreston offers reliable and convenient access to high-quality services through member firms located around the globe. Currently ranking as the 12th largest accounting association in the world, Kreston now covers 125 countries providing a resource of over 25,000 dedicated professionals.

This global network can be of huge value to our clients who can benefit from enhanced research coverage, local market knowledge, and cross-border professional expertise.