One Ltd company, three businesses

Rose1988

paddyrg wrote: »

The product may make or lose money
The consultancy should make money without much risk
The event could lose you a ton of cash very easily

Three very different risk profiles but if they're grouped together under one limited company they're all as safe as the riskiest. If your event rains off/has an accident and gets sued it could easily skewer the other two businesses. I'd suggest hiving it off into its own limited company just to ringfence liabilities should bad things happen. Did you know, for instance, that every feature film, every years festivals, etc are run as separate bodies corporate for exactly this reason?

I did not know that, thank you.

Pennywise wrote: »

If three businesses under one company, you have free movement of cash between them, i.e. if one is profitable, and the other makes a loss. You also have easy transfer of losses to the profitable business for corporation tax purposes.

However, three separate companies means it's not as easy for one to prop up another. Monies drawn from one will basically be taxed as being paid to you personally, and then you pay the money into the other company with no tax relief. Same with transfers of tax losses, far more difficult to transfer a loss from co a to set against profits in co b, in fact you probably need a group structure which itself would be costly and hard to administer.

Advantages of separate companies are protection if one goes under, it won't take the others with it.

If you're not worried about protection, then simplest is one company, one bank account, but three trading divisions, but you need a more complex accounting/book-keeping software to analyse the different departments/cost centres to know how each division is progressing.

No easy answer, it's all a matter of relative risk, and how your businesses are likely to proceed, i.e. flows of cash between you and between each division.

I completely understand.

Obviously I am yet to speak to the accountant, but having listened to your feedback, I think I will continue to focus on the first idea and once that is up and running and I am in a position to, I will revisit the situation when I am actually ready to start the next venture.

lisa110rry

Rose1988 wrote: »

Thank you for your feedback, it allows me to think about other alternatives.

Lisa110rry, this is a very good idea as I am allowed to register more than one trading name on a bank account so I could have the option of things being paid using the Ltd company name or t/as name but keep everything under one account!

If you decide to do it this way, get yourself a date stamp (Trodat Printy type) that says "received" then the date, then has a blank line where you can write "C" for Consultancy, "P" for product and "E" for event and make yourself stamp every purchase invoice, same with office copy of every sales invoice (suggest you do that on the back in case your client requests a copy invoice!). Then your accountant can use those markers in Quickbooks or whatever software they use. They can run queries which will select whatever reports you need to run out.