Hello there
We have a client who has a holding company (A), and two wholly owned subsidiaries (B & C).
The activities carried out by B & C were largely similar, and the client decided to transfer B's business and assets into C, leaving B with just some share capital, balanced by cash.
The question is, how are B's reserves relfected in the accounts of C? Can they simply be transferred into C as an increase to reserves? Or should the reserves be distributed to A as a dividend, resulting in a loan owing from C to A for the value of that dividend.
Many thanks for any comments.