Multiple Businesses & Banking

Silver_3

Hi everyone,

I think this question has been asked before but upon reading the previous threads I’m still not clear about my situation.

Basically I want to run multiple businesses but preferably only use one business account (because I don’t want to be lugging around 5 separate cheque books, business credits cards etc.) A bank I spoke to said I could open one main account and then create sub-accounts under it OR open multiple business accounts (want to avoid this!).

I also need to be able to accept payment on some businesses just under that business name. As on some businesses I don’t want my name to appear on a bank statement. For instance, I want to do some photojournalism work under one business name and also leave myself open to do more serious art work under my real name as a business name. But I don’t want my artist name tarnished by doing “chatty” magazine articles if you know what I mean! I know the magazines must know my real name for verification but I only want to publish under a pseudonym and preserve my relative anonymity. I hope this makes sense.

Q1. Is it main account name which appears on the customer’s bank statement? Or is it the main account name plus the sub-business name? Or just the sub-business name? Or will it be the main account name plus my personal name?

Q2. Can I legally have one generic company name and do a variety of trades under that name? Or will this be frowned upon by authorities?

The main thing here is my potential for anonymity and wanting to protect that as much as possible.

Thank you for reading this,

Silver

chriz1000

You can have one limited company and run multiple venues from this company. You can also trade under different names, in my experience the bank will usually accept payment from both the business name and the trading name.

Silver_3

Sorry forgot to make it clear that I am a sole trader and not a limited company.

Silver

WHA

If you are a sole trader, you can't have anonymity - see http://www.companieshouse.gov.uk/about/gbhtml/gbf3.shtml which gives various information relating to the Business Names Act 1985:-

"2. What details must be disclosed about a business?

You will need to disclose (as appropriate):
the corporate name; or
the name of each partner; or
the individual person's name; and
in relation to each person named, an address at which documents can be served.

3. Where must this information be shown?

You will need to show the information clearly in all:
the places where you carry on your business and where you deal with customers or suppliers;
business letters;
written orders for the supply of goods or services;
invoices and receipts;
written demands for the payment of business debts. "

Basically anyone doing business with you as a sole trader has to know exactly who you are. You may get away with anonymous trading names in leaflets, adverts, websites, etc., but when you get to the stage of transactions, i.e. orders, invoices, payment, etc., then they have a legal right to know who they're dealing with.

This makes any further consideration about bank accounts irrelevant - you can't trade as "business x" without your customers and suppliers knowing it is run by "fred smith". Anyway, it is at the discretion of the bank whether they put your own name, trading name, or both, on your cheque book, bank statements etc - each bank will have its own protocol.

To acquire true anonymity you do need a limited company, it would have to use a mail-box address and you would need nominee directors, secretary and shareholders, all of which can be quite a cost.

Also, you can't avoid tax liabilities such as registering for VAT by having multiple businesses in your own name - VAT registration for sole traders is done "per person" not "per business".

Also, you mention not wanting to carry multiple cheque books, but have you considered the admin burden of having to prepare multiple annual accounts, multiple 4 page supplementary sections on your personal tax return for each business, how you're going to apportion costs between businesses - i.e. you'd need multiple mileage logs to claim travel expense, for how long was your computer used in each business, how do you apportion your telephone bills, etc etc. It would be an administrative nightmare!

Another point, though, is why you're not trading as a limited company - even with the recent reversals of Gordon Brown's own incentives for setting up companies, most small businesses who have an average level of profit will be better off by being a limited company. Have you considered having a limited company for some work, and being self employed for others - it would have to be worth the hassle!

BUT, coming back to the original point, yes you can have multiple "trades" or "divisions" under a single self employment, partnership or limited company. In most cases though, you need a damn good reason for going to all the bother!

Silver_3

Thank you WHA. That was very informative and helpful. I don't mind people knowing who I am should they choose to, but I don't want my name immediately put on leaflets, websites etc. like you said. I want to do some e-commerce from home but don't want my home address for the whole world to see. Which yes, would mean getting a PO Box or hiding my house number by calling my home "Trump Towers" as suggested on another thread.

I take your point about the administrative burden! I know a guy who runs 10 pubs and puts the takings into one GIRO account. Phew!

I think I might just use a separate personal account for things in my name (artwork etc.) as I don't expect many transactions for the first year at least. But then won't the bank get annoyed if they suspect it's for business use? After all they'd want to charge me to use a proper business account.

And then use a generic corporate sounding name for the media/web content work I intend to do. I could become limited company with my brothers (software engineer & graphic designer) once it takes off as we are all in related areas.

I don't need to be VAT registered at present.

Thanks
Silver

robertbruce

Hi
From my experience, you can market yourself any way using any suitable name. It is only when it comes to writing the cheque that someone needs to know the account information, in your case the part that shows your name. Yes, you need to disclose it on invoices, etc. but by then it is people you are doing business with, not general marketing leaflets to all and sundry. I never show my address on marketing items, and I can just about live with Yellow Pages making me show it on my entry, and I find that no-one ever even asks my BUSINESS NAME until well after the sale is concluded. Maybe that's because my selling style concentrates 100% on the customer and his needs and never on me or my products. Maybe this would work for you as well. As I mentioned on another thread, just get the sales and worry about the admin as you go, hopefully within a planned structure, though. Regards. Bob.