There are distinct advantages of this approach but there is also another vehicle of operation that investors can consider, an LLP (Limited Liability Partnership). They are often thought of as a hybrid between a partnership and a company.
LLPS were formed in 2001 and offer a great advantage in the flexibility afforded to partners. The agreement drafted between the partners can be a flexible way to apportion income between partners year on year, according to needs of the individuals concerned.
The major flexibility arises in the ease with which an LLP agreement can be changed compared with changing the structure of a company. This can be particularly useful for family property investment businesses where the needs of different partners can vary year on year.
An LLP can have a partner who is a limited company as well as individuals. Benefits can arise in some situations as companies pay tax at 19% (17% from April 2020) and higher rate taxpayers pay tax at 40% and above. This is a common approach for joint ventures.
Careful advice should be sought in determining which vehicle is right for you as no two circumstances are the same.