Which Business Structures Can Hold a Sponsor Licence? (SMEs, Groups, Franchises)

Business Structures that Hold a Sponsor Licence (SMEs, Groups, Franchises) emerges as a topic that invites businesses of every shape and size to reflect on how their internal structure aligns with sponsorship expectations. In exploring the landscape of limited companies, charities, PSCs, SPVs, group arrangements, multi-site operations and franchise networks, this discussion takes a steady, structured look at how organisations position themselves when seeking a sponsor licence. Rather than diving into technicalities, it sets the scene for understanding how entities relate to one another, how they present themselves to the Home Office, and why questions around linked companies, operational reach, and the “sponsor licence for group companies” theme continue to sit at the heart of strategic workforce planning.

Eligible Structures: An Overview

1. Limited Companies (LTDs) and Public Limited Companies (PLCs)

Standard UK limited companies (LTDs) and public limited companies (PLCs) are usually the easiest to apply for a sponsor licence. They generally meet the main requirements: registered in the UK, genuine trading activity, HR systems in place, and designated personnel such as Authorising Officer, Key Contact, and Level 1 User.

Key points for LTDs and PLCs:
• They can apply on their own for a sponsor licence.
• They need to show they genuinely trade or plan to trade and have roles suitable for the visa route.
• The company’s size, whether a small or large enterprise, may affect fees and risk assessment, but it does not prevent eligibility.

2. Charities and Non-Profit Organisations

Charities registered in the UK may also hold a sponsor licence provided they meet the statutory criteria (genuine organisation, HR systems, etc). The official guidance and legal commentary show that charitable sponsors are treated similarly, though sometimes benefit from lower fees.

3. Sole Traders and Personal Service Companies (PSCs)

The guidance makes clear that individuals cannot normally act as sponsors, except where a sole trader seeks to employ someone within their own business. In such cases, the sole trader must show a genuine business need and a legitimate working arrangement.

Personal service companies, however, often attract closer scrutiny. Because they are usually small entities linked to an individual professional, UKVI may examine whether the company is genuinely operating, how it is structured, and whether the sponsored worker will carry out real work for the business rather than simply providing services through the PSC.

4. Group Companies, Holding Companies and Subsidiaries

When we discuss a “sponsor licence for group companies,” the situation naturally becomes more complex. A corporate group may include a parent company, several subsidiaries, and operations at multiple sites. The common question arises: can a single licence cover the whole group, or does each entity need its own?

In general terms:
• A group is not automatically treated as a single licensing entity. Each company within the group may require its own licence unless it is clear that one entity acts as the central sponsor and the others operate under its oversight.
• Changes such as ownership transfers or mergers can affect how a licence applies, meaning it cannot simply move from one legal entity to another without proper steps.
• Many groups manage this by holding a licence through the main operating company while maintaining oversight and compliance across other entities.

This approach highlights the importance of clear structure, careful planning, and consistent management of sponsorship responsibilities across all parts of the group.

5. Special Purpose Vehicles (SPVs) & Multi-Site Operations

An SPV is a separate legal entity created for a particular project (for example, a construction site, an event operation, or property development). Multi-site operations may include regional branches or franchise/affiliate locations. Key considerations:

• The SPV must show it is a genuine organisation undertaking business in the UK and has operations that recruit overseas workers.
• If the SPV is part of a wider group, UKVI will consider whether the SPV is effectively independent or simply a cost-centre. If merely a subsidiary of the main business with no genuine separate operations, the risk of refusal may increase.
• For multi-site operations, the licence needs to cover the site where the sponsored worker will work. If workers will move across sites or serve multiple sites, the sponsor must have systems in place to monitor. Failing to show proper controls can lead to compliance issues and potential revocation.

6. Franchises and Franchise Networks

A franchise network typically features a franchisor (central company) and multiple franchisees (separate legal entities) running individual sites under the franchise brand. In terms of sponsor licensing:

• Each franchisee who recruits non-UK workers would typically need its own licence unless the franchisor holds the licence and has arrangements in place with the franchises to issue Certificates of Sponsorship (CoS) and monitor compliance across sites.
• If the franchisor holds one licence for multiple sites, they must demonstrate clear oversight of each franchisee site, HR systems, record-keeping and duty compliance across the network. If this control is insufficient, UKVI may require separate licences for each franchisee.

When Does a Single Licence Work and When Are Separate Licences Needed?

Single Licence Structure

A business may successfully hold one sponsor licence covering multiple sites/roles if:

• The legal entity holding the licence is the employer of record for sponsored workers or has a contract of employment with them.
• The site(s) where the overseas workers will work fall under the same legal entity, and the licence addresses those sites.
• HR systems, compliance monitoring, record-keeping, training and responsibility (Authorising Officer, etc.) cover all operations where sponsored workers are located.
• There is a clear organisational structure explaining how sub-entities relate to the licence-holder (for group companies, multi-site chains or franchise networks).
• The role meets route eligibility (skilled worker, temporary worker, etc).
  In such cases, the cost, complexity and compliance burden of multiple licences may be avoided.

When Separate Licences Are Needed

Separate licences may be required when one or more of the following apply:

• The business structure involves multiple legal entities (different companies), each employing overseas workers, and they cannot be shown clearly as part of one licence-holder.
• Franchisees or affiliate sites operate as legally independent companies with separate HR, payroll, governance and control and recruit their own overseas workers.
• The site is in a remote location or operating under a different legal entity from the sponsor-holder, and UKVI cannot assess how the licence-holder oversees it or ensures compliance.
• The business model includes SPVs created for specific sites/projects, and there is insufficient evidence of oversight or integration with the licence-holder’s compliance systems.
• A takeover, merger or restructuring changes the legal entity sponsoring workers, and the licence-holder has changed ownership or name without UKVI being notified; in such cases, a fresh licence may be required.

Pitfalls and Compliance Risks for Group Structures

• Assuming automatic coverage: Just because a group holds one licence does not guarantee coverage for all subsidiaries or franchisees.
• Licence transfer misunderstandings: After mergers/acquisitions, the licence won’t automatically transfer — UKVI may treat it as a new entity requiring its own licence.
• Inadequate oversight of multi-site operations: If the sponsor licence‐holder cannot demonstrate consistent HR oversight, duplicate record systems or disparate payrolls may raise red flags.
• Franchise model risk: For franchise networks, relying on the franchisor licence without documented oversight, clear contractual terms, shared HR systems and audits across franchisees may lead to refusal.
• SPVs recruiting externally: Stand-alone SPVs that recruit overseas workers must still meet the genuine organisation test; if treated as cost centres or non-genuine trading units, a licence may be denied.
• Changing legal employer status: If the employer legal entity changes (via takeover, restructure), UKVI may require a new licence or impose sanctions/curtailment of sponsored workers.
• Record-keeping and compliance duties: The latest Part 3 guidance emphasises sponsor duties and compliance – failure to meet them (e.g., unreported absences, changes in employment) can result in downgrading or revocation.

Best Practice Checklist

1. Map your legal entities: Identify all UK companies, SPVs, subsidiaries, franchises, and branches where you may sponsor overseas workers.
2. Decide where the licence will sit: Choose the legal entity that will apply, and assess whether it will cover all operations or if each entity needs its own licence.
3. Document employer of record status: Ensure the entity employing the sponsored worker is the licence-holder, or there is a clear contract arrangement.
4. Ensure HR/Compliance systems cover all sites: For group models, your compliance infrastructure must demonstrate oversight across the group.
5. Review contracts with subsidiaries/franchisees: Where the licence-holder relates to franchisees or group companies, you must show adequate control, training, monitoring and record-keeping.
6. Apply early if restructuring: If you are undergoing mergers/acquisitions, restructuring, or forming new SPVs, assess whether a separate licence is required rather than assuming coverage under an existing one.
7. Maintain communication with UKVI: If your structure changes materially (new subsidiary recruits overseas workers, change of ownership, new site), update your key personnel and ensure you remain compliant under the guidance.
8. Keep clear records: All sponsored workers must have records retained, and you must notify UKVI of changes to status, employment, salary, business structure, etc.

Conclusion!

Understanding which business structures can hold a sponsor licence, and when separate licences might be required, is ultimately a matter of clarity, planning and good governance. Whether your organisation is an SME, a multi-company group, a franchise network or a standalone trading entity, the key is to approach sponsor licensing with transparency and a clear sense of responsibility. The idea of a “sponsor licence for group companies” can seem straightforward, but each business must consider how its structure operates in practice, how oversight is maintained, and how compliance is managed across every site or linked entity.

For larger groups or franchise models, the temptation to assume a single licence will cover all activity is common. Yet without careful mapping of relationships, defined oversight and consistent HR systems, businesses risk exposure to avoidable issues. Taking the time to document arrangements, assess operational control and align your structure with UKVI’s expectations is an essential step in reducing compliance risk.

At SponsorLicenceHub, we remain committed to guiding organisations of every size and structure through the shifting landscape of sponsor licensing. By following our updates, insights and practical frameworks, you can ensure your business remains prepared, informed and aligned with best practice, whatever changes lie ahead.