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24 November 2020
Potential future claims against business premises.
My client runs a successful trading company which has accumulated substantial reserves and is currently enjoying a period of growth.
As part of their expansion plans they are seeking to acquire business premises. They are looking at ring fencing the risk from potential future creditor claims against the business premises to be acquired. Apart from the obvious solution of owning the property personally which would require the extraction of funds from the company through the dividend route I have come up with the two following possibilities.
- Form a holding company after obtaining the usual clearances and pay a dividend up to the holding company to fund the property acquisition with additional funds required being by way of bank borrowings due to the cost involved.
- Set up a parallel property investment company (PropCo) which would receive a loan of say £500 000 from...
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