Why would someone set up a holding company?

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Morning! I’ve got a quick question about company types. I’m getting ready to start a new venture in England, but am not quite sure how to proceed. An accountant friend advised me that it would be worthwhile to set up a holding company as part of my new project, but I don’t know the first thing about holding companies! Above all else, why would somebody set up a holding company? For example, are there any major benefits?

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Holding companies are set up for the purpose of owning assets, buying shares in other companies and/or controlling other companies - they do not carry on any other type of business or trading activity. They types of assets they may hold include: land and buildings, vehicles and machinery, bonds, patents, copyrights, trademarks, and shares in other limited companies.

Holding companies are just like any other type of limited company because they exist as separate legal entities with limited financial and legal liability. This means that any losses or liabilities of the holding company are the responsibility of the holding company (not its owners), and any losses or liabilities of a holding company's subsidiaries (the other companies in which it owns shares), are the responsibility of those subsidiaries (not the holding company).

a year ago
 

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