Holding Co or Trust - Better protection?

[markwilson92]

Hi all! I've been reading lots about holding companies & trusts these past few days. I run a medium sized business approx £500K turnover & worried that most of my wealth is actually inside my company

I work in a reasonably high risk sector with lots of clients & moving parts and want to safeguard financial assets against anyone ever potentially trying to come after the company god forbid & potentially losing everything!

Just wondering if anyone has any suggestions on the safest (and 100% legal of course!) ways to protect the financials inside the business - would it be to move to a holding co - to which i've read people can still come after? or to open a trust with the people who i wish to leave my company & assets to when i pass (partner & brother)

Many thanks!

 

[2020Lawyer2020]

It depends what the assets are. eg I have advised groups of companies who use one company to own the patents or the copyright or the original person who set up the company keeps ownership of that and just licenses it in to the company to be used under a written licence agreement. Similarly traditional solicitor partnership would have an individual partner owning the freehold premises and granting a lease to the partnership

If it is cash then you have to take that out of the company only lawfully (and infact even with IP if a company already owns it and you want to move it you should get full shareholder approval otherwise you may breach company law and the same with directors' duties to the com,pany - making the company worse off is not always lawful). On the other hand declaring a dividend to directors or a company buying back its own shares (which can be complex legally bit can be done) or a company deciding to split into two parts is fine. In fact quite a few people in the property world will set up a new company - special purpose vehicle company for each property that is acquired.