start LTD during IVA and secure company money

nestbird

I have dilemma. i'm halfway through IVA. an opportunity arose to stabilize income through franchises. I want to do this by setting up a LTD company and paying myself as a director a salary and dividend that will cover the expenses of normal living and the rest of the company's income for future investment in the company after the end of the franchise. Will the rest of the income in the company account be treated as personal income that I have to share with the IVA?
Thanks, M.

flipflopflo

I’m so sorry but your post is not really clear as to what help you need. Please could you explain what it is that we can help you with. 

Potbellypig

I'm no legal expert but I know from running Ltd company businesses that any money invoiced and paid to the Ltd company becomes that of the business. It only becomes yours when you pay it to yourself by salary and dividends. If it looks like you're trying to hide income through this process then I'd always be worried about what could be tapping me on my shoulder (probably why you've asked the question really).

nestbird

I'm not trying to hide because everything will be anyway in the tax report and in the LTD report but for example, my cost of living is now 2k/month including iva and my current income is similar. when I will start a business that will cost me a huge franchise fee and give me an income 3k per month I will prefer to save this extra grand for the end franchise too by my own tools/equipment.
If I will run this business as a self-employed this extra income will be treated like just an extra lump sum and half can be taken by iva and I will have no chance to secure future business investment. Every money will be visible anyway. just want to keep separate private money and company money and company money must be secured for normal monthly expenses and investments because if the company will have no money I will have no money as well. simple. 

Jonboy_1984

I would be careful of any franchise that promises guaranteed incomes. My industry has seen quite companies run one successful outlet and attempt to franchise it out.

They end up providing some glossy marketing materials and some basic training that can be done by independent trainers for less (ask wholesalers in the industry if they know of any), and not much else of any use before getting bored and moving on a few years down the line.

They may try and restrict where you buy to “ensure quality” which translates as “have a kickback arranged”.

They can also try to lock you in with no compete clauses that make it difficult to move on (they will often sell you a territory, and try to insist you cannot trade post-franchise in the same area). 

nestbird

Thanks for advice

I I've done research about this idea. 

I spent about 3 months doing research on the market in the industry,

 also talking to other people running this business, 

so I am confident that I have a chance to finally go straight when it comes to money.
but this is a long term project and will require investment as well so i need to secure company money.

silvercar

Do you have the investment secured? Otherwise I fear you will struggle to secure funding for a new limited company. Most lenders would require personal guarantees and credit check those offering them, if you have an IVA I imagine your credit record may be poor.