Companies are often involved as part of a broader structure of a business. They are useful for asset and liability protection but the structures have to be carefully thought through when they are set up. Importantly, from time to time they should be reviewed to ensure they are still relevant and appropriate.
Licences and other arrangements between companies within a group, as well as securities given by one company to another, can be an effective means of quarantining liability if a particular business goes bad.
As well as the role of a company within a broader structure, its also very necessary, to make sure the structure of the company itself is appropriate.
Different classes of shares can have different rights and once set up, these can be very difficult to change if the shareholders of that class do not agree. Frequently, disputes arise between the shareholders of a company and its directors.
In addition, there is a complex interplay between the structure of the company or a group of companies and taxation, employment, trade practices and many other branches of law.
You should speak to one of our Corporate Law Team specialists today to make sure your own structures are appropriate for your needs and that your liability has been minimised.