Why consider changing your business structure?
Have you ever thought about business restructuring? At BK Plus, we’ve seen many businesses benefit from a little change. Business structures evolve with the needs of a company, and as your business grows, you might find that a different structure, such as a holding company, could offer more advantages. Adapting to these changes is not just about addressing current challenges but also about setting the stage for future opportunities, growth and stability.
What is a Holding Company?
A holding company stands out as a strategic tool in business restructuring, and unlike companies that dive into daily operations, a holding company’s main job is to own and oversee assets. These assets can be diverse, from shares in other companies to patents and real estate.
The strength of a holding company lies in its ability to shield these assets from potential operational risks, offering a layer of protection that many businesses find invaluable for long-term stability.
How does a ‘Wholly Owned Subsidiary’ fit in?
When we talk about holding companies, the term ‘wholly owned subsidiary’ often comes up. It refers to a company that is entirely owned by another company, in this case, the holding company. This structure allows the holding company to have full control over the subsidiary, ensuring that the assets and operations align with the parent company’s goals. It’s a way to further diversify and protect assets, especially if the subsidiary operates in a different market or industry.
Why establish a Holding Company?
There are several compelling reasons…
Protection of assets
By placing assets in a holding company, they are shielded from any financial issues or claims that might arise in the operational business.
Efficient property management
Holding companies can own property, allowing the business to lease it back for operations. This separation ensures that the property remains protected and can be an effective strategy for businesses with valuable real estate.
Depending on your business and location, structuring with a holding company can lead to tax efficiencies, potentially reducing liabilities.
If you have multiple businesses or branches, a holding company can streamline operations, leading to cost savings and more cohesive management.
Whether you’re thinking about succession, selling parts of your business, or acquiring new ones, a holding company offers flexibility in planning and execution.
Taking the next step with BK Plus
Restructuring is about aligning your business structure with your current needs and future aspirations. At BK Plus, we’re dedicated to understanding your unique situation and offering tailored guidance. If you’re pondering a change or seeking clarity on your options, reach out to our restructuring team today.