Creating a subsidiary company

[js76155]

Hi, We are an established software development company in Scotland producing innovative and ground breaking video surveillance and building management software. Our products are premium products geared towards enterprise class customers and organisations.

We have been under pressure recently from a global distributor to savagely discount our products so they can develop their sales channel. Although we understand this approach, we don't wish to devalue our flagship products to compete in the low-end market. Nor do we wish our brand to be recognised as a competitor in this market. I wish to create a new business entity and a new (stripped out) product for this market. So here are my questions, if anyone can assist:

1. Can our existing Scottish registered limited company create a subsidiary entity to address this market?
2. Do we have to appoint directors, or can the original business entity create the subsidiary?
3. I we must have directors, can the same directors ethically represent both companies?

Thank you in advance for any forthcoming advice.

[Ian J]

1) Yes
2) Yes
3) Yes

Your company can have a subsidiary and it may have the same directors and ethics doesn't really come into it as many companies have a premium product selling alongside a more basic version - Toyota and Lexus being one example

[js76155]

Thank you for your kind feedback, Ian.

James