Please see our full Signpost document regarding Family Investment Companies for more information on these vehicles.
An unlimited company must be registered at Companies House.
In a normal trading scenario, the company operates in a similar manner to a limited company. In other words, the shareholders have no direct liability to its creditors.
However, where a formal insolvency takes place, there are some important differences.
In these circumstances, and the company lacks the means to pay off its debts, the creditors have access to the personal assets of the shareholders / members. Their liability is joint, several and unlimited.
In other words, you could lose your shirt!
The main reason one might do this is to reduce the filing requirements at Companies House.
In any event, a ‘small’ limited company will only need to file abridged accounts with no profit and loss account or directors’ report and there will be no audit requirement.
In addition, one might also choose to use a non-UK limited company to avoid public disclosures (see below).
The clear disadvantage is that, in an insolvency situation, an unlimited company will not afford the same protection from creditors as its limited friend.
However, if the Company only holds a portfolio of investments then it is perhaps somewhat unlikely that claims will arise.
If one wants to avoid having to file at Companies House for privacy reasons then one might wish to consider using a non-UK FIC such that ordinary members of the public are unlikely to be able to view the company’s details.
For further details see using a non-UK Family Investment Company
We have significant expertise in exploring client’s objectives around estate planning and succession. As such, we are well placed to advise on whether a Family Investment Company might fit in with these objectives.
If you have any queries around Family Investment Companies then please do get in touch.
Please see our full Signpost document regarding Family Investment Companies for more information on these vehicles.
Last updated 12 December 2019
