How to set up a family investment company: the legal steps

Family investment companies (FICs) are now a go-to structure for families who want to retain control of their wealth while planning for future generations. Setting one up involves more than simply incorporating a company – every stage needs careful legal planning to get the structure, governance, and share arrangements right from the outset.

A well-structured FIC can hold investments, property, and other assets while keeping decision-making in experienced hands. The key is getting the legal foundations right.

If you’re considering creating a family investment company, our corporate solicitors can guide you through each stage of the process. We also work closely with accountants, IFAs, and wealth managers to ensure your FIC fits within your wider financial strategy.

Step 1: decide on the company structure

An FIC is incorporated as a private limited company under the Companies Act 2006. Before registration, you’ll need to decide:

• Who will act as directors (often parents or senior family members).
• Who will hold shares (and whether to issue different share classes).
• What the company’s purpose will be – typically managing investments rather than trading.

Legal advice at this stage helps define control, ownership, and the balance of influence from the start.

Step 2: choose and draft the share structure

The share structure determines how control and profit are divided. Most FICs use at least two classes of shares:

• Voting shares to give founders ongoing control.
• Non-voting or growth shares to let the next generation benefit from value increases over time.

Your solicitor will prepare tailored articles of association and a shareholders’ agreement to reflect these arrangements and prevent future disputes.

Step 3: fund the company

FICs are usually funded through a mix of:

• Director loans, which can be repaid over time under agreed terms
• Share subscriptions, where family members buy shares to introduce capital
• Gifts of capital, which may form part of wider wealth or succession planning

All funding must be properly documented. Loan agreements and company records ensure transparency and avoid complications later.

Step 4: appoint directors and issue shares

Once the company is incorporated, directors are formally appointed and shares are issued to family members. This is recorded through:

• Board resolutions
• Share certificates
• Updated statutory registers

At this stage, the articles of association and shareholders’ agreement come into effect, setting out how the company operates and how decisions are made.

Step 5: establish governance and compliance

Strong governance keeps an FIC running smoothly and preserves trust among family members. Directors should ensure:

• Accurate board minutes are maintained for major decisions
• Statutory books are kept up to date
• Companies House filings are made on time
• Financial reporting meets legal requirements

Regular reviews help the company stay aligned with its purpose and adapt as family circumstances change.

Step 6: integrate the FIC into your wider planning

An FIC should sit within the family’s overall investment and succession strategy. Collaboration between solicitors, accountants, and wealth advisers ensures a joined-up approach.

Legal and financial teams should coordinate on:

• How ownership transitions will work over time
• How loans, dividends, and distributions are managed
• How to maintain control while introducing younger shareholders

When to seek legal advice

Setting up an FIC is a strategic process, not an administrative task. Every decision – from share rights to director appointments – has lasting implications. Working with experienced corporate solicitors ensures the structure is sound, compliant, and built for longevity.

FAQs about family investment companies

Below, our corporate solicitors answer some of the most common questions clients ask when exploring whether a family investment company is right for them.

1. How long does it take to set up a family investment company?
   
   Most FICs can be incorporated within a few days, but drafting and agreeing on the legal documents usually takes longer, depending on complexity and family arrangements.
    
2. Can a family investment company own property?
   
   Yes. Many FICs are used to hold residential or commercial property portfolios, which can make long-term succession and management simpler.
    
3. Do I need different share classes?
   
   Usually yes. Different share classes allow founders to retain control while passing value to younger generations. Your solicitor will advise on the most suitable structure.
    
4. Who should manage the FIC day to day?
   
   Directors are responsible for decisions and compliance. In most cases, parents or senior family members take this role, with younger members gradually introduced.
    
5. Do I need professional advice to set up an FIC?
   
   Yes. The company’s legal documents, funding, and governance must be properly structured to protect the family and avoid disputes later.
    

6. Should my FIC be structured as a limited company?

   No. An FIC should be registered as an unlimited company to avoid certain regulatory requirements such as

Expert guidance from our FIC solicitors

Setting up a family investment company involves more than completing registration forms. It requires strategic planning, tailored documentation, and careful coordination between legal and financial professionals. Our solicitors help families establish FICs that are robust, compliant, and aligned with their long-term goals.

Dylan Leet, real estate finance and corporate solicitor, says:

“By transferring family wealth into an FIC, parents can maintain control over assets while gradually passing value to the next generation. Professional legal advice is essential when forming the company, as small structural decisions can have various succession and control implications.”

Our solicitors design company structures that reflect each family’s goals – balancing control, flexibility, and succession planning. We also collaborate with accountants, IFAs, and wealth managers to ensure every element of the structure supports the client’s wider financial objectives.