Structuring of various Brands/Companies

[MiddlemistRed]

Hello all!

I am looking for some advice on how to legally structure a range of brands which will protect the trademark of each and make accounting as easy as possible.

I currently have a Ltd company which has a brand trademark attached to it, but I will be creating various more brand names/companies, all operating as e-commerce only, all selling in different niches. I want to be able to protect the brand trademarks should each individual company not be a success.

So I believe from what I've read so far I could have a parent / holding Ltd company with various trading names operating under that Ltd company, but will that protect the brand being used by each of these trading names should that company fail? And I'm assuming they shouldn't be run as sole trader businesses? Also, who should own the brand? Presumably the overarching Ltd company?

Look forward to hearing all your thoughts and experiences!

 

[Mark T Jones]

You protect a brand via IP - not a Ltd company - https://www.gov.uk/intellectual-property-an-overview

For trading purposes it would be far simpler to simply operate trading styles under one Ltd company - you can always set up separate entities as you go.

Do be aware however, that in most cases the value of a brand exists almost entirely in the mind of its owner. Build value in your business and the brand might follow.

 

[MiddlemistRed]

Hi, thanks for your reply.

Sorry I maybe wasn't clear with what I meant when I said protecting the Brand. I was meaning in relation to any problems that might arise with regards to not being able to use the trademark if the company was dissolved.
Thanks.

You protect a brand via IP - not a Ltd company -

For trading purposes it would be far simpler to simply operate trading styles under one Ltd company - you can always set up separate entities as you go.

Do be aware however, that in most cases the value of a brand exists almost entirely in the mind of its owner. Build value in your business and the brand might follow.

 

[fisicx]

As suggested, one limited company running a number of eCommerce websites. You then apply for a trademark for each website.

But I wouldn’t bother with trademarks for an e-commerce store. The protection you get is limited and it’s not difficult for a rival to cause problems which can cost you a lot in litigation.

 

[fisicx]

Hi, thanks for your reply.

Sorry I maybe wasn't clear with what I meant when I said protecting the Brand. I was meaning in relation to any problems that might arise with regards to not being able to use the trademark if the company was dissolved.
Thanks.

Trademarks and company registration are not connected. You can have one without the other.

 

[MiddlemistRed]

Trademarks and company registration are not connected. You can have one without the other.

Thanks for your reply, this is also my understanding, however if a company was dissolved and it was the owner of a trademark, what would happen to the trademark is my concern. This is why I am looking carefully at how to structure the various companies and trademarks.

I think it makes sense to have the holding company own the trademarks and the other companies within that use it.

 

[Mark T Jones]

Register the trademarks in your own name

 

[MiddlemistRed]

As suggested, one limited company running a number of eCommerce websites. You then apply for a trademark for each website.

But I wouldn’t bother with trademarks for an e-commerce store. The protection you get is limited and it’s not difficult for a rival to cause problems which can cost you a lot in litigation.

Thanks!
Trademarks for selling on Amazon is super important though and stops other sellers jumping on your listings.

 

[Ozzy]

if a company was dissolved and it was the owner of a trademark, what would happen to the trademark is my concern.

In this situation the trademark becomes the property of the Crown, as do all assets of a dissolved company.

Register the trademarks in your own name

I agree with this, with the exception that it depends on your objectives for the business. If your long-term goal is to sell the business, then having it all held in the company makes for a much cleaner sale, and the buyer's solicitors will have fewer concerns about trademark ownership.

Personally, I always and without exception have a plan to sell any business I'm involved in so I always wrap up ownership of everything into the company - and then just make sure the company is always tidy and never gets dissolved

 

[fisicx]

Thanks!
Trademarks for selling on Amazon is super important though and stops other sellers jumping on your listings.

Fair enough. But if that's the only reason it seems to be complicated and costly way to do things. Why has the brand/trademark got to be the connect to the company name?

 

[businesscon]

Thanks for all the insights! Just to clarify, I want to ensure that if one of my e-commerce brands under a holding company faces issues, the trademarks can still be used. Can anyone confirm if that’s the case?

 

[eteb3]

The way the enormous likes of Unilever etc do this is to have a holding company at the top of a structure which owns all the IP, and wholly owned subsidiaries take all the risks. If those go belly up the trademark is unaffected. The subsidiaries pay a hefty fee to use the IP, so some of the motivation may be to offshore the profits. But from what you describe you want, a holding company may be a solution for you.

Thanks to other people’s tax shenanigans you probably want to ask you accountant what it does to your tax position, but I can’t see why the subsid needs to pay anything at all for the trademark, so Holdings could probably be dormant if you like.

If the subsids are wholly owned I think that would take care of @Ozzy ’s exit situation? You sell the holding company and it comes with all its children?

 

[Ozzy]

If the subsids are wholly owned I think that would take care of @Ozzy ’s exit situation? You sell the holding company and it comes with all its children?

Indeed, yes. Although a corporate structure like this for what might be a small concern may have an extra layer of due diligence (questions) but if it's tidy it will be fine once you've explained everything and warrantied as needed.