Get UK Law Questions Answered by Verified Experts
1. The issue of whether you sell the shares of a holding company or a subsidiary company depends on which entity you wish to pay tax. If you sell the subsidiary company, then tax will be levied on the holding company at the corporate tax rate. If you sell the holding company, then tax will be payable in the hands of the person who holds the shares and it will be Capital Gains Tax. so you need to calculate the tax payable when you are selling either as this is the chief determinant of that you do here. I am happy to help further.
2. In this financing approach, it is best to sell shares in the subsidiary company because it means that the investor only gains a share in the particular venue owned by the subsidiary. If you start selling shares in the holding company, then it gets very messy for you as promotor, as you then have all these different people having interests in all the venues, not just one. So you are better off sell a slice of each subsidiary company and keep control of the overall venture yourself by retaining the shares in the holding company. You can then use the shares in the holding company for you, personally, raise any finance you might wish for the over all venture. This then remains in your own sole control even though you might not own all of each subsidiary because you had to finance each separately. This way you gain maximum flexibility whilst retaining overall control.