Wolters Kluwer CT Corporation podcast explores popularity of holding company structure

Rhea-AI Summary

Wolters Kluwer CT Corporation has released a new episode of the CT Expert Insights Podcast, focusing on the advantages of establishing a holding company to safeguard assets amid economic uncertainty due to COVID-19. Sandra Feldman explains that these structures protect subsidiaries' assets from liabilities, allowing for riskier investments without jeopardizing core operations. However, managing multiple subsidiaries increases regulatory complexities and costs. Companies considering this structure should consult legal experts for tailored advice.

Positive

• The podcast highlights the protective benefits of holding companies against liabilities.
• Wolters Kluwer CT Corporation has a strong reputation, trusted by over 75% of Fortune 500 companies.
• The episode provides valuable insights for businesses considering a holding/operating structure.

Negative

• Increased complexity and regulatory obligations associated with managing multiple subsidiaries.
• Initial formation fees and ongoing compliance costs may deter some businesses.

New CT Expert Insights Podcast discusses how to maintain critical asset and liability protections

NEW YORK--(BUSINESS WIRE)-- The economic uncertainty wrought by the COVID-19 pandemic has made it more daunting than ever for companies to risk venturing into new business segments. But by structuring itself as a holding company a business entity can help protect itself and its assets from the financial aftermath of a failed venture or legal action. If those same assets are not carefully arranged throughout the larger enterprise, however, the protection a business enjoys can quickly disappear. That’s according to a new episode of Wolters Kluwer CT Corporation’s recently launched CT Expert Insights Podcast.

Sandra Feldman, Publications Attorney at CT Corporation, explains that the popularity of the holding/operating company structure is largely owed to the degrees of separation it provides. So long as a holding company keeps its subsidiaries’ assets isolated from both itself and one another, the fallout of a potential business downturn or legal action remains limited. Feldman uses the hypothetical example of a holding organization that owns two operating companies during the podcast – one a successful manufacturer of widgets and the other a restaurant that is struggling financially due to the pandemic.

“Let’s say the restaurant had to close for a while because of COVID-19 and it ran up debts it’s having trouble paying. The restaurant’s creditors can only look to the assets of the operating company that owns the restaurant to satisfy the debt,” Feldman notes.

With that protection firmly in place, holding companies can invest in new startups or markets without incurring risk to their core businesses. Still, the more operating companies that a holding company owns, the more complex its corporate structure and regulatory obligations will become. For instance, holding and operating companies are subject not only to initial formation fees, but annual compliance costs as well.

Feldman noted that many large holding companies invest in an entity management system to help govern the enterprise. She also urged businesses considering a holding/operating company structure to consult with legal experts who can assist them in weighing their unique set of pros and cons.

“And if they decide to go ahead, CT Corporation is a trusted partner that can help form the holding company and operating companies and also assist with various post formation and compliance needs,” Feldman adds.

For nearly 130 years, Wolters Kluwer CT Corporation has been the leading provider of registered agent services, incorporation services, and legal entity compliance. It is part of Wolters Kluwer’s Governance, Risk & Compliance (GRC) division and has a global reach into over 150 countries. More than 75 percent of Fortune 500 companies, 95 percent of AmLaw 100 law firms, and 350,000 small businesses trust CT Corporation to handle their compliance needs. The other legal services business of Wolters Kluwer GRC is Wolters Kluwer ELM Solutions - a global provider of enterprise legal spend and matter management, contract lifecycle management and legal analytics solutions.

About Wolters Kluwer Governance, Risk & Compliance

Governance, Risk & Compliance is a division of Wolters Kluwer, which provides legal and banking professionals with solutions to help ensure compliance with ever-changing regulatory and legal obligations, manage risk, increase efficiency, and produce better business outcomes. GRC offers a portfolio of technology-enabled expert services and solutions focused on legal entity compliance, legal operations management, banking product compliance, and banking regulatory compliance.

Wolters Kluwer (AEX: WKL) is a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. Wolters Kluwer reported 2020 annual revenues of €4.6 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,200 people worldwide.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211222005004/en/

Media Contact for Wolters Kluwer GRC

(including Wolters Kluwer CT Corporation and Wolters Kluwer ELM Solutions)



Paul Lyon

Global Corporate Communications Director

Governance, Risk & Compliance Division

Wolters Kluwer

Office +44 20 3197 6586

Paul.Lyon@wolterskluwer.com



Frank Ready

Senior Specialist, Corporate Communications, Legal Services

Governance, Risk & Compliance Division

Wolters Kluwer

Office 717-205-3647

Frank.Ready@wolterskluwer.com

Source: Wolters Kluwer

FAQ

What is the main topic of the CT Expert Insights Podcast episode from Wolters Kluwer?

The episode discusses how to maintain asset protections through holding company structures amid COVID-19-related economic uncertainty.

Who provides insights in the CT Expert Insights Podcast episode?

Sandra Feldman, a Publications Attorney at CT Corporation, provides insights on holding company structures.

How can a holding company protect its subsidiaries' assets?

By isolating the assets of each subsidiary, the holding company limits liability exposure from debts and legal issues.

What should businesses consider before forming a holding company?

Businesses should consult legal experts to understand the pros and cons of holding company structures.

What is the reputation of Wolters Kluwer CT Corporation?

CT Corporation is trusted by over 75% of Fortune 500 companies for compliance and registered agent services.