In Short
- Structure Benefits: A dual company structure separates risks and protects assets for fintech ventures.
- Investment Appeal: It offers flexibility for investors and partnerships without affecting the entire business.
- Challenges: Managing multiple entities increases complexity and costs, especially for early-stage startups.
Tips for Businesses
When considering a dual company structure, evaluate your long-term goals, investment needs, and risk appetite. This structure can provide growth opportunities and risk isolation but may also increase administrative burden and costs.
Similar to many technology companies, financial technology (fintech) comes with many new opportunities. As such, the type of business structure that you choose is critical to optimising your fintech venture. This article will explore a dual company structure and explain the considerations necessary to optimise your fintech venture.
What is Fintech?
Fintech is a term used to describe the innovative use of technology in the financial services industry. It is about making financial services more accessible, efficient, and often cheaper for everyday people and businesses. The same considerations often underscore how you optimise your fintech venture and company structure.
What is a Dual Company Structure and What Does it Involve?
At its core, a dual company structure involves two entities:
- a holding company (HoldCo); and
- a subsidiary operating company (OpCo).
While connected in the corporate group structure, each entity performs a different function to protect assets, isolate risk and limit liabilities to specific entities within the overall structure. The following outlines at a high level what a dual company structure would look like for fintech ventures.
In addition to owning 100% of the shares in the OpCo, the HoldCo holds the business’ valuable assets, which would include:
- intellectual Property (eg, patents for innovative fintech solutions or processes and Data Assets; trademarks for brand names and logos; and copyrights for software code, user interfaces and content); and
- data assets (e.g. customer databases, market research and analytics, and big data sets, especially for Artificial Intelligence (AI) and other machine learning models).
While the HoldCo owns the shares in the subsidiary, the OpCo is the entity that is responsible for the running of the business and delivery of financial services, which would include:
- managing day-to-day business operations;
- developing and maintaining the fintech product or platform;
- handling user experience and user interface;
- maintaining the information technology infrastructure and systems, including data security and cybersecurity measures;
- entering into contracts with clients, employees, etc;
- marketing and sales; and
- hiring employees.
Additionally, if your fintech company conducts a financial services business, the OpCo holds the Australian Financial Services Licence.
Continue reading this article below the formConsiderations
Three key considerations exist for optimising your fintech venture under a dual company structure.
1. What are Your Short and Long-Term Goals?
First, it is important for you to consider whether a dual company structure aligns with your short and long-term goals. In almost every case, your fintech venture is geared towards scaling up the growth process from a small startup to a larger and more established business that better serves the increasing demands of a larger customer base.
If such a rapid expansion is on the agenda, it is crucial that your chosen company structure can support it. As your fintech venture grows, a dual company structure can significantly assist your fintech venture in scaling up by providing a flexible and efficient framework for growth.
For example, you can easily enter new markets by establishing regulated OpCos in different jurisdictions, enabling you to operate in these different markets without affecting the entire operation. At the same time, it is important for you to consider the unique regulatory requirements of each jurisdiction, especially the implications of establishing OpCos in another jurisdiction.
2. Are you Looking for Investments, and What is your Risk Appetite?
Capital raising and investments are often a quintessential part of any fintech venture. As fintech continues to evolve and further entrench itself within the financial services industry, it has undoubtedly become a significant focal point for financing startup companies and small businesses with long-term growth potential, including venture capital investments.
Furthermore, the dual company structure allows for strategic investments or partnerships in specific entities without affecting the entire structure. Indeed, the aforementioned reasons and more of such a structure can make your fintech venture more attractive to different types of investors. These can include, but are not limited to:
- angel investors;
- venture capitalists; and
- private equity firms.
Risk management is a key consideration for any company. A dual company structure is often ideal because it isolates regulatory and operational risks to specific entities, thus protecting the core business.
Additionally, risk management allows for more efficient capital allocation based on risk profiles of different activities. Moreover, it enables the company to take on riskier ventures or innovations without jeopardising the business.
3. Complexity, Cost and Administrative Burden
The drawback of a dual company structure is that it is more complex to manage several entities and has more ongoing administrative fees and paperwork, compounding with every additional company in the structure.
For very early-stage startups, given the likelihood of limited resources, scale, or market focus, the benefits might not outweigh the costs and complexity. However, as the business grows or as goals change, a restructuring is still possible, subject to tax considerations.

This guide will help you to understand your corporate governance responsibilities, including the decision-making processes.
Key Takeaways
While dual company structures have certain disadvantages, many fintech ventures deduce that their benefits outweigh the drawbacks as they scale and expand into multiple markets or other products. Notwithstanding, it is important for fintech ventures to carefully and holistically consider their specific circumstances and short—and long-term goals before adopting a dual company structure.
If you have further questions regarding business structures, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
How does a dual company structure protect assets?
A dual company structure establishes, at the very least, a HoldCo and an OpCo, whereby each entity, while connected in the corporate group structure, performs a different function to protect assets, isolate risk, and limit liabilities to specific entities within the overall structure.
How do I restructure my company?
Please visit this article for the steps to change from a single to a dual company structure.
We appreciate your feedback – your submission has been successfully received.