2 Limited companies

stealer · 25th September 2008, 14:34

Not sure if this should be in the accounting section or not but I have a quick question. GF and I are both contractors, both seperate ltd companies registered at the same address. Both have accountants, payroll, bank accounts etc. Would it be beneficial to close her company down and she invoices from my company?

Is there a reason this can't be done? Looking for 1 set of accounts, 1 payroll, 1 insurance etc if it's allowable. Would she need to be a director of my account or can she be the secretary and still fulfill her commitments with her own clients?

No problem splitting she dividends, and I assume this wouldn't be classed as income splitting as she's earning almost the same rate as me anyway.

Any thoughts?

Sausage Surprise · 26th September 2008, 10:46

You must be loaded

Do you have monkey butlers?

stealer · 26th September 2008, 10:47

Quote:

Originally Posted by Sausage Surprise

You must be loaded

Do you have monkey butlers?

Ha ha, no, but what a cool idea

...does anyone have a view?

Manic · 26th September 2008, 10:52

Perfectly ok, myself and a friend do it, we split everything 50-50.

VectraMan · 26th September 2008, 10:57

If she's going to get dividends she'll need to be a shareholder, and if youco is already trading there may be issues with that. Might be better to start a new company between you if this is definitely what you want to do.

Nothing wrong in principle, but what if one starts earning a lot more than the other, will you be happy with a 50/50 split? What if she runs off with your best mate / you get her sister pregnant, are you still going to be happy to be in business together?

stealer · 26th September 2008, 10:59

Quote:

Originally Posted by VectraMan

If she's going to get dividends she'll need to be a shareholder, and if youco is already trading there may be issues with that. Might be better to start a new company between you if this is definitely what you want to do.

Nothing wrong in principle, but what if one starts earning a lot more than the other, will you be happy with a 50/50 split? What if she runs off with your best mate / you get her sister pregnant, are you still going to be happy to be in business together?

Is it not possible to have a meeting and release more shares? I don't mind making her buy them :-D

ratewhore · 26th September 2008, 11:32

Quote:

Originally Posted by VectraMan

What if she runs off with your best mate / you get her sister pregnant...

Pessimist. Can't you see they're in love...

BolshieBastard · 26th September 2008, 18:18

Surely from an IR35 point of view, its better to have one company, two directors and two interchangable 'resources' rather than two separate limited co's or one limited co with you as a shareholder and your 'partner' just invoicing \ working through the same limited co?

thunderlizard · 26th September 2008, 18:26

Quote:

Originally Posted by stealer

Is there a reason this can't be done? Looking for 1 set of accounts, 1 payroll, 1 insurance etc if it's allowable. Would she need to be a director of my account or can she be the secretary and still fulfill her commitments with her own clients?

Yes, believe it or not, it is possible for somebody to work for a company and not be a director of it

But she might want to be one, in order to have more of a say in what happens.
If she's going to be a shareholder, your company can just issue her with the requisite number of shares, assuming it's still got enough unissued shares. Most small sole-shareholder contractor companies get formed with 1000 shares but only issue a couple to the shareholder (obviously, check this is true of yours). So if you're after a 60/40 split, and you've already got 2 shares, your company can issue 4 to her and another 4 to you.

stealer · 29th September 2008, 11:22

Quote:

Originally Posted by BolshieBastard

Surely from an IR35 point of view, its better to have one company, two directors and two interchangable 'resources' rather than two separate limited co's or one limited co with you as a shareholder and your 'partner' just invoicing \ working through the same limited co?

This is kind of what I thought, in terms of IR35, it would look like "my" company has 2 clients. Which surely is better? GF is paid a salary as a normal employee but also gets dividends when they're paid out. Or would this slap her right inside IR35?