Groups

Group companies can be quite complex and are usually the business structure of larger companies that have related subsidiaries.

A subsidiary is a company that is owned by another company, owning 51% or more of its share capital. Share capital is the money invested by shareholders into the business and in return receive shares in proportion to their investment.

Example

Company M owns 80% of the share capital of company T

Company T owns 75% of the share capital of company D

Effectively, company M owns 60% of the share capital of company D, therefore company D is a subsidiary of company M.

Companies owning more than 75% of a subsidiary benefit from a range of reliefs that can be utilised within the group, group relief for losses and tax refund surrenders to other subsidiaries within the group.

These are just a few of the benefits that can be utilised as part of a group structure, however they come with further complexities and will more than likely require a specialist accountant to guide you through.

Get in touch with us at MTD if the above sounds like a business structure you have envisioned for you companies.