Key Features of a NameCo

NameCos were first set up in Lloyd's for the 1997 year of account. Their foundation led to an increase in the number of unlimited liability Members choosing to convert to limited liability status. NameCos allowed Members to underwrite on a limited liability basis as a UK registered company.

A new company must be established and ready to trade by the time that the Lloyd’s Capacity Auctions take place in September 2010. In effect, this means that it must be set up by the end of August. Ideally, it needs to be established before this date, so as to allow time for portfolio planning with HAL.

The NameCo trades on a limited liability basis. In practice this means that liability is limited to the assets held within the company. An individual or a group of individuals can participate in a NameCo.

Ownership of the shares of a NameCo can be bequeathed upon death so that the company can continue to trade on.

Tax implications of a Nameco

As a UK registered company, the NameCo’s Board of Directors can determine the company’s dividend policy. In practice, this means that underwriting profits can be retained, or paid out as a dividend.  Dividends carry a tax credit. Additional tax may have to paid, depending on the level of the individual shareholders’ other income.

NameCo shares qualify as business assets for Inheritance Tax purposes.

If grouped with other companies taxed in the UK its results can be grouped together for tax purposes.

The disposal of shares in a NameCo will be subject to Capital Gains Tax.

Entrepreneurs’ Relief may be available.