A holding company, sometimes referred to as a ‘parent’ company, is simply a limited company that is set up for the purpose of:
- owning assets and shares in other firms, and/or
- managing or supervising other businesses
A holding company is a majority shareholder in other firms, which are thereafter classed as subsidiaries of the parent company.
Register a holding company online in under 24 hours
Setting up a holding company is exactly the same as setting up any other kind of private company limited by shares. You will have to provide the following information on an application form and file it at Companies House:
- company name
- registered office address
- Standard Industrial Classification (SIC) codes (max. four)
- directors’ details – minimum of one required
- shareholders’ details – minimum of one required
- statement of capital
- memorandum and articles of association
- people with significant control (PSCs)
The quickest and most affordable way to register a new company is through an authorised company formation agent. Rapid Formations is one of the UK’s leading company formation specialists, providing online registration at Companies House in under 24 hours (subject to Companies House workload on the day).
The entire process is carried out online, and all information and documentation is submitted to Companies House securely via Software Filing. You will receive your incorporation documents as soon your application is approved. Your new company will be ready to trade immediately.
Including the word ‘holding’ in a company name
Until recently, the word ‘holding’ was included on the list of sensitive words and expressions under The Company, Limited Liability Partnership and Business (Sensitive Words and Expressions) Regulations 2014.
Since 31st January 2015, there is no need to seek permission from the Secretary of State at Companies House to include the word ‘holding’ in a company name.
Hello,
my question is we have registered company in UK as private limited and want to convert this into a holdco and then we incorporate our firm in Delaware as OPCO so can you tell me how can i convert private limited company into holdco, steps and what documents needs?
Thanks,
Adeel
Thank you for your comment, Adeel. In order to make the UK company a holding company, you’d need to make it a majority shareholder in the Delaware company. Please contact our Sales & Support Team on 020 7871 9990 to find out whether this is something we can assist you with.
Kind regards,
The Rapid Formations Team
hi, when setting up a holding company, do i need to inform HMRC of the subsidiary companies under the holding companies? If so – how?
Thanks for the question.
As far as we are aware, there is no requirement to notify HMRC of the subsidiary companies.
Regards,
The Rapid Formations Team
Hi, I have set up a limited company to act as a holding company. What would you class the industry as because it’s a non operating company?
Trying to set up a business bank account for the company but I don’t know how to describe the activities of the company. Plus many banks, particular free challenger ones, won’t accept a holding company.
Thanks
Thank you for your kind enquiry, Adam.
The most common Standard Industrial Classification (SIC) code for a holding company is: 82990 – Other business support service activities not elsewhere classified. This is because, as you state, it does not technically have any business activities bar being a holding company.
With regards to business bank accounts, this may be more problematic; we would recommend you approach the same bank that any subsidiary limited companies have and explain the relationship between them.
We trust this information is of use to you.
Regards,
The Rapid Formations Team
Pls I intend opening a holding company basically using financial trading like forex & stock trading and use the profit to acquire dividend shares from companies and also using the dividends to invest on my own businesses but my main aim is a holding company. I have raised £120,000 as capital to start. Pls advice me. I want to use this model.. Using funds from trading financial market to acquire shares still under my holdings.. Thanks
Thank you for your kind enquiry, Sam.
With regards to using shares from publicly traded markets to acquire shares in a private limited by shares holding company, this would only be possible if you sold the publicly traded shares and used the funds to do so. There is no mechanism to use public limited company shares for private limited company shares.
I trust this information is of use to you.
Regards,
Rachel
Hi there,
A really useful article and comments – thank you. We currently have a small UK consultancy company (limited) and are also now looking at having another consultancy run by a separate director elsewhere in the UK (a separate, but linked, field of specialism/industry, would also be a limited company). We have also been discussing setting up another company (also limited) to provide corporate training within our area of specialism.
All in all, from everything I’ve read (you’re right, it’s surprisingly difficult to find good information about this on the internet!) this seems like the perfect scenario to make the set-up of a holding company the perfect overall vehicle for financial/ asset/ tax etc efficiency. However, it seems that quite a few sources suggest that a holding company can hold less than a majority share in a subsidiary with no issues, whereas others, including yourselves, clearly state that the holding company has to have over 50% of the shares in each subsiary?
We do not want to own that much of the subsidiary companies (other than our initial consultancy, which would be 100% owned by the holding company/ original shareholders) as we want each new company and it’s director to have a level of autonomy and incentive to suceed – is there really no case with holding company: subsidiary company structuring whereby the holding company can own less than 50% of some subsidiaries? It doesn’t seem to make sense – what’s the reason for this and is there a way around it at all?
Many Thanks for your assistance 🙂
Hi Luke,
The Companies Act 2006 specifies criteria that must be met for a company to be a holding company. It states that a company is a “subsidiary” of another company, its “holding company”, if that other company—
(a)holds a majority of the voting rights in it, or
(b)is a member of it and has the right to appoint or remove a majority of its board of directors, or
(c)is a member of it and controls alone, pursuant to an agreement with other members, a majority of the voting rights in it,
If you are implementing the structure for tax reasons we would advise that you seek professional accounting/tax advice.
Kind regards,
Rachel
Hi, I was wondering, do i need to include the word holding, when i incorporate a UK holding limited company
Dear Sir/Madam,
There is no requirement for holding companies to include the word ‘holding in their company name.
Rachel at Rapid Formations
Hello Rachel,
I have a company that I plan to make a holding one. It already has a bank account. Do I need to set up new bank accounts for the newly formed subsidiaries or are they allowed to use/share the existing one of the holding company?
Kindest Regards
Hi Anderson,
I’m not 100% sure about the legality of that, but I would advise against it anyway. You should keep your companies’ finances separate to make your accounting and booking as straightforward as possible. Furthermore, it may cause concern for customers if they are asked to make a payment to a bank account which is registered in a different company name.
Best wishes,
Rachel
Hi
I am from the Netherlands looking to create a holding company or only LTD with bank account in UK.
Can I get also as Dutch get active bank accounts?
Thanks and kind regards
Hi Herman,
It is possible to open a UK bank account, even though you are not a UK resident. However, you will probably have to visit the UK in person – this is a requirement of most banks.
Another option is opening a business bank account in the Netherlands. This will be possible if you get your company formation documents legalised (“apostilled”) and provide copies for the bank – these legalised documents verify that your UK company legally exists. You can read more about this process here: https://www.rapidformations.co.uk/apostilled-documents/
I hope this helps. Best wishes,
Rachel Craig
Do holding companies have active bank accounts for the receipt and distribution of dividends from it’s subsidiaries or is there a more commercial way?
Regards.
Hi John,
Yes, holding companies can have active bank accounts for receiving and distributing dividend payments.
Best wishes,
Rachel Craig
Hi Rachel,
I’m an engineer working with two other professionals on two separate projects that can evolve into separate businesses should we get EU funding. I also want to start my own consulting business to support myself in the meantime. I was thinking that instead of starting three businesses i could just start one holding company that will own my percentage in the other two businesses and also provide my consulting services. Is this possible to do inthe UK? The reason is that i want to avoid later on paying taxes for buyouts or tranfers of shares. I’m from Greece and here it is possible to start a “Mixed Holding Colpany” that also offers services or products but the setup costs are twice those of setting up an llc in the USA.
Hi George,
Generally, holding companies are only used to own shares in other businesses and/or manage other companies, rather than actually providing specific commercial services.
I’m afraid I cannot say for sure what is the best option for you because your situation sounds rather complex – I would strongly advise consulting a reputable accountant to help you with this matter and determine the best way forward.
Best wishes,
Rachel Craig
Hi Rachel,
I was just wondering.I am about to set up my business operations which comprises of three businesses and two major shareholders.
Business 1: Holding Company- 60% of the shares (30% each)
Business 2: Subsidiary- 20% of the shares (10% each)
Business 3: Subsidary- 20% of the shares (10$ each)
Correct me if I’m wrong, but is this how the operations would be if I were to set up all three businesses?
Also is it possible to set up all three businesses with that ‘hierarchy’ at the same time, bearing in mind nothing has been opened yet.
Thank you so much!
Yours,
John
Hi John,
Thanks for getting in touch. However, I’m not sure I fully understand what you are asking!
You can certainly set up all three companies at the same time – one parent/holding company and two subsidiaries. For business 1 to be classed as a parent company, it must own more than 50% of the issued shares in each of the other two companies. You stated that two shareholders will collectively own 60% shareholdings in business 1 – who will own the remaining 40%.
If you plan to have two shareholders jointly owning business 1, they can each hold 50% of the issued shares in business 1. The business itself (not the two shareholders) can then own a majority (or all) of the shares in the two subsidiaries.
I think it would be best to speak to an accountant to work out the particulars of this venture to ensure everything is in order.
Best wishes,
Rachel Craig
Hi Rachel,
Thanks for the speedy reply, I shall speak to an accountant, but I think I do understand now!
Yours,
John
Hi John,
That’s great! Hope you get it all sorted, and good luck with everything.
Rachel
Hi there, I am looking to create a holding company that would own majority shares in my IT consulting ltd company (trading) and a new property purchase and rental company (ltd SPV) Is this a common model as I cannot find anything similar through a simple internet search? Am I right in assuming that all three companies would be responsible for filing accounts each year and that all three would also be independent from a trading and debtor point of view?
Hi Gemma,
A holding company is simply a limited company that owns majority shares in another company, so you can set up a normal limited by shares company for this purpose. There’s very little guidance available online, which is frustrating, so I would advise making an appointment with an accountant to discuss your best course of action. We don’t deal with SPV companies so I cannot advise on that aspect I’m afraid.
Yes – all three companies would be responsible for filing separate annual accounts, tax returns (if applicable) and confirmation statements (this replaces the annual return requirement from the end of this month), and all three companies would exist as separate legal entities with regards trading and debts.
Best wishes,
Rachel
Hi,
I have recently moved to South Africa and I have 30-40 Shares on 2 different companies.
I am therefore looking to manage these shares through a UK holding company. Can this be done? I no longer a a physical address in the UK but still have an active Bank account, if that helps.
Hi Roel,
You can set up a UK limited company online from anywhere in the world, and you can certainly do this for the sole purpose of holding shares in other companies. When you have set up your new company, you will have to complete a stock transfer form to transfer the shares from you (the current shareholder) to your new company.
This article explains the share transfer process: https://www.rapidformations.co.uk/blog/share-transfers-from-one-person-to-another/
I hope this helps.
Rachel
Hi,
i have 2 separate limited company, i want get these company under one new holding company, i was wondering how to this? can you please help
Dear Ashok,
Thank you for your email.
You will have to set up a new private company limited by shares. This will be your holding company, or ‘parent’ company. Once this has been done, you should transfer a majority (over 50%) of the shares in your other two companies to your new holding company. Your new company will then be a majority shareholder of both of these companies, thus it will be classed as a holding company. The other two companies will be known as ‘subsidiaries’ of the holding company.
I hope this helps. Let me know if you need any more help.
Best wishes,
Rachel
Hello.
Can a holding company make global investments online? Is doing it online legitimate? Has this been done before?
Please let me know. Thank you.
From Neudell
Dear Neudell
Thank you for your message.
As far as we are aware there are no restrictions on a holding company’s activities. We cannot comment on whether what you intend to do has been done before.
Kind Regards