Should you tidy up your corporate group?

Public companies and large private companies that have been incorporated a number of years are likely to have accumulated a number of subsidiaries, some of which will be defunct. In other cases, the subsidiaries may not be actively trading but may have historic liabilities, actual or contingent. In both cases, it may make sense to get rid of these unwanted subsidiaries. What are the alternatives?

Defunct companies may have come into being following an acquisition or group reorganisation, or where a proposed transaction, for which new companies have been incorporated, does not complete. Alternatively, a new company may have been incorporated as a vehicle for marketing a new product, which does not then come to fruition.

These defunct companies may persist simply because no one within the group has responsibility for them — the administrative burden is spread across different departments with the consequence that no one person appreciates the overall cost of their maintenance. The costs of maintaining these subsidiaries can be significant — in wasted management and company secretarial time and audit fees. There are other reasons, unrelated to costs savings, why it can be beneficial to rationalise dormant subsidiaries, including…

If you are registered and logged in to the site, click on the link below to read the rest of the Walker Morris briefing. If not, please register or sign in with your details below.

Sign in or Register to continue reading this article

Sign in


It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer


Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.


Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.


Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Walker Morris

View more briefings from Walker Morris

Analysis from The Lawyer

View more analysis from The Lawyer


Kings Court
12 King Street

Turnover (£m): 42.50
No. of lawyers: 188