The business, called Xsequor, is a three way partnership between Allen and the commercial broadcaster's former commercial director Ian McCulloch and ex-legal director Kyla Mullins.
The company will specialise in restructuring and realigning businesses that are media-centric - with a view to improving their structure and profitability.
McCulloch told Media Week: "Our specialism is looking after organisations with brands, intellectual property and a people culture - not manufacturing and not as narrow as just media companies. Many organisations behave like media companies - such as certain charities.
"Our main difference [to other media consultancies] is we have all hired consultants ourselves and seen what works and where the gaps are. Xsequor is operated by senior managers who have all delivered big changes in business.”
It is not known if the new business will force Allen to give up his string of directorships that he has taken on since leaving ITV in 2006. Allen is currently serving as chairman of Global Radio, non-executive of Endemol and sits on the board of Virgin Media among other positions.
Allen has been credited with securing the merger of Granada and Carlton in 2004 that finally brought ITV under single ownership. But he left the commercial broadcaster citing a drop in viewing figures and falling advertising revenues under his tenure.
“The role of the chief executive is to take the bullets in the creative community when it doesn't go well and step out of the light when things go well," he said at the time.
McCulloch, who left ITV in May 2007, has since been operating as a freelance consultant as well as sitting on the Digital Britain Steering Board.