Setting up sister company in the UK where the main company is overseas...?

Question

Dear all,

I have been invited to start a UK based company to deal with the administration of the business activities of a property development company based outside the EU. It is a legit business as we are breaking away from an existing regulated company in the UK to continue our niche business independently. The company will have two directors, myself included with an equal shareholding. I am concerned about whether a contract signed and registered in the UK can be overridden by a contract signed and registered overseas in relation to the main company. Ie I am afraid of being swindled out of my profit share if the company overseas holds all the profits main through the sister UK company which I will be party to. Does anyone have suggestion as to where I can obtain further info, publications, text books where I can learn about these aspects of business law?

Thanks eternally

C x*x

Answer 1

Sounds dodgy, why would it be set up in the UK and not where its going to be? After all UK pays more tax than most countries especially none EU countries.

More info needed etc What is the niche business etc?

Answer 2

Contract law in the UK is very strong and would protect you depending on content of contract.

If you are signing contract in 3rd country then that countries law will prevail. I hope this is some help.

You can always look this info up at UK companies house. All best and let's keep idiots out of here.

Answer 3

You are not at all believable; for if you are a part of a company such as you state there would be no reason you would be on this medium to ask such a facitious question.  You see if you are who you say YOU WOULD HAVE A COMPANY ATTORNEY on the payroll and he would give you that answer..............double DUH, DUH.

Answer 4

Sounds as if you need to proceed with caution.  I know someone who was UK based for an overseas property company and he recently lost everything that he'd put in despite it all appearing legitimate at the outset.  You need good legal advice on this one.

As a start, contact your local Business Link for some guidance.  They'll be able to point you in the right direction for the type of help you need.

You say that your company would deal with the administration of the other company, which doesn't sound too much like an independent company.  The tax man gets picky about whether companies are independent or not and it can affect your allowances if you can't demonstrate a clear distinction.

Business Link should be able to put you in touch with initial legal advice on all of this and then, if you decide to go further, you'll need a good solicitor with you all the way.  Better to invest a bit in legal help at this stage than to lose a lot later or become involved in expensive litigation.

The other thing to draw up with a solicitor is a legal agreement between the shareholders.  We have them in our companies, even although my husband and I are the only directors of one.  Where we have another director, it's vital.

Good luck!

Answer 5

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