Especially in your case, Gale, I think you will need proper legal, insurance and accounting advice and ongoing. It can cost several thousand dollars each year initially and since.
What is a holding company?
In Canada, you can have a Holdco. This is just the nickname of the “holding company”, a company that owns assets. Typically, assets include cash and investments, but they can include other assets such as real estate, or in your case vending machines and ATMs.
If your company will own real estate and engage in other business activities, it can be considered an “operating company” or “OPCO”, as well as a holding company or Holdco.
Some businesses will maintain two separate companies: one OPCO and one Holdco. For example, if the risks of OPCOs can lead to litigation, for example, holding assets in a separate Holdco may make sense, they can be secure.
If OPCO may be sold one day, you may need to separate Holdco assets so you are eligible for a waiver of life capital gains and separate your company savings from other assets.
In your case, keeping everything in one company might be easier, but there are pros and cons. And, of course, you should seek legal advice.
Use of shareholder agreement
It is also recommended to use lawyers to formulate shareholder agreements. If you have your own company, or if you and your spouse own a company, this may not be that important. However, once you have other shareholders, especially friends or business partners, shareholder agreements are important.
The agreement can handle situations such as one of the shareholders being banned, divorced or even death. It can handle situations where there are differences among shareholders. As far as your property is concerned, what if some shareholders want to do a renovation and others want to sell the property?
