client owns Co A 100%
they now need a new company for a new venture - Co B this will be a joint venture with 50% owned by a third party. Client wants their 50% owned by a new holding company Co C - owned 100% by the client
Co C will not hold any shares in co A which will be retained by the client personally.
Am I missing something? can't really see the point of the holding company C, only seems to add complication and extra cost to the client.
Would company B bet better off just being owned by Co A and keeping it at 2 companies?
some reassurance or enlightenment would be appreciated!
Replies (2)
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Some people like lots of companies
I guess is that this keeps the joint venture at arm's length from the individual, so that may be why.
A number of reasons
Firstly, I would ask why your client thinks this is the best structure for them.
Perhaps they want to hold the investment in the joint venture separately for a future sale?
Remember if company A holds the investment in company B you will need to consolidate the investment in the joint venture in consolidated financial statements under FRS9/FRS102 (unless exempt).