Can a company limited by shares hold shares in another company?


I own a small marketing business in Scotland. It is a private limited company. One of my former employees is now starting his own marketing company, and has offered me a share in his company. I’m tempted, but would rather place that share in the ownership of my company, rather than myself. Is it possible for a company to own shares in another company? Or do I have to take on ownership of this company share as an individual?



How does this work under Section 87 of The Small Business, Enterprise and Employment Act 2015 with the "Requirement for all company directors to be natural persons"?

10 months ago

I also am questioning the above, because my family company (A) is a 50% shareholder and director of another company (B), so can I actually take a salary from (B)?

8 months ago

Yes, a company can own shares in another limited company. This is because a limited company exists as an individual ‘person’ in the eyes of the law. A company that owns shares in another company is known as a ‘corporate shareholder’.

Your company must be registered on public record as a shareholder of the other company. The share certificate issued by the other company will be in your company name, not your own name.

When you pay for the shares, the money must be transferred from your company’s bank account, not your own personal account. Any dividend payments your company receives from the other company must be paid into your business bank account - this money will belong to your company, not you.

All dividend payments your company receives from these shares will be classed as income, so you will have to state this income in your company accounts and Company Tax Return.

2 years ago

Your answer


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