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The advantages of registering a subsidiary company in the United Kingdom: registration of a subsidiary company can have many key benefits for the UK business person. Essentially, a subsidiary company refers to a legally registered business that is either wholly or partly owned by a larger entity (i.e. the parent company). While this is not always a straightforward process, and you may need specialist help to establish a subsidiary company, it can be very worthwhile if you do it right. Here are some of the most valuable advantages: -
It limits liability: one of the most common reasons that UK entrepreneurs register a subsidiary company is to limit their liability. As long as you ensure all operations are above board, the parent company will not be liable for certain potential costs, such as compensation or legal charges. As long as the parent company holds a certain amount of stock, it will always have control over the subsidiary's behaviour, yet the subsidiary's losses will not always be its responsibility, making it a doubly advantageous situation.
It simplifies the division of a business: by incorporating a subsidiary company, you register a defined legal structure under which the rest of your limited company can now be divided. This is particularly useful should you be branching your business out into other countries, where they will be operating under a different legal and financial system to the one in the UK. Each subsidiary can operate with an entirely different corporate culture and management system, while still being linked back to your parent private company.
Brand building: many business people choose subsidiary company registration in order to create separate brands, each with their own identity and public image, while managing them all from a single conglomerate corporation. This helps the various products and services you sell maintain their own distinctiveness in the eyes of your target market. If a subsidiary venture fails, it is easy for the parent company to disassociate itself from the project.