Buying or selling a company
Family investment companies (sometimes abbreviated to FICs) have recently become very popular. In simple terms, a family investment company is a private limited company which is set up in a way to enable an individual to pass wealth to the next generation, whilst still retaining control of his assets.
There are a number of ways in which a family investment company can be structured:
- Different classes of share may provide that one shareholder controls the voting rights and day to day operation of the company and another class benefits from income and capital rights.
- Growth or flowering shares may be issued. These enable shareholders to benefit in any growth in the value of the company after a specified date (for example, if children are coming in and taking over a family business).
- Freezer shares may be issued. These work in the opposite way to growth shares and freeze the value of the shares at a given date.
- Different funds might be set up. Funds work in a similar way to having different share classes but go a step further in allowing different shareholders in the same company to have distinct rights to income and capital and even to the control of subsidiary entities.
The corporate team at BBS Law has considerable experience in the setting up of family investment companies and can provide advice and assistance both working with your tax advisers on the structuring of the transaction and also in the preparation of the bespoke documentation required to ensure that the structure works in practice.