Single Ltd Co to include startup and contracting revenue

[password]

Hello all and Happy New Year!

I have decided that I am going to give contracting a go, being fully aware of all the pitfalls. I also have an idea for a startup business that I am going to go a long way towards bootstrapping as I can do the engineering myself.

So straight off the bat I would set up a ltd company for the contracting work and revenue. The thought crossed my mind to include the startup business in that same company for the simple reason is that any expenses that are accrued can be a) funded by the contracting revenue and b) offset against my contracting revenue.

Has anybody done this before? I know it might not be best to mix these too and also if I end up going for SEIS funding my contracting activity may come against me.

Any thoughts.

Thanks all.

[Lance]

if you're genuinely more interested in the startup, then using professional services revenue to get the company going is absolutely fine (assuming not TOTALLY different businesses, like the startup being an internet bookie/trader/landlord).

Still best to talk to an accountant about it though. Especially as they may want to charge you more for a setup like that. They'll know the complexities better.

[MrButton]

Single Ltd Co to include startup and contracting revenue

I hate to sound like NLUK but you really need to talk to an accountant for a proper plan/advice.

They will be able to setup your limited company as well as advise on how to manage your startup.

I assume I will depend on specifically what you’re contracting as and what your startup is.

Someone I know has done something similar and setup a separate limited but loaned money between the companies. Not sure if this is the most efficient way to do it though.

Edit: lance beat me to it

[Jessica@WhiteFieldTax]

It’s all possible, and plenty do it, but chat with your chosen accountant first.

Major risk is IP from startup in contracting co and trading risk if something happened to contracting co. But that’s easily mitigatable, move the IP once it has value of its own, it’s just being aware of the right time to do it.

[password]

Thanks guys.

Thats a good insight about the IP.

Cheers.

[Darren at Fox-Bartfield]

SEIS

Hello all and Happy New Year!

I have decided that I am going to give contracting a go, being fully aware of all the pitfalls. I also have an idea for a startup business that I am going to go a long way towards bootstrapping as I can do the engineering myself.

So straight off the bat I would set up a ltd company for the contracting work and revenue. The thought crossed my mind to include the startup business in that same company for the simple reason is that any expenses that are accrued can be a) funded by the contracting revenue and b) offset against my contracting revenue.

Has anybody done this before? I know it might not be best to mix these too and also if I end up going for SEIS funding my contracting activity may come against me.

Any thoughts.

Thanks all.

As the other guys mentioned, if you're going down the SEIS/EIS route, you'll need specilist advice. Recommend chatting with [email protected] if you need to run through the options but would keep your contracting company separate to your other project.

[Andrew@Wisteria]

Hello all and Happy New Year!

I have decided that I am going to give contracting a go, being fully aware of all the pitfalls. I also have an idea for a startup business that I am going to go a long way towards bootstrapping as I can do the engineering myself.

So straight off the bat I would set up a ltd company for the contracting work and revenue. The thought crossed my mind to include the startup business in that same company for the simple reason is that any expenses that are accrued can be a) funded by the contracting revenue and b) offset against my contracting revenue.

Has anybody done this before? I know it might not be best to mix these too and also if I end up going for SEIS funding my contracting activity may come against me.

Any thoughts.

Thanks all.

Hi Password.

It used to be the case that you could offset brought forward losses only against profits of the same trade, however these rules have been relaxed somewhat. Our specialist corporation tax team would be able to discuss in more detail.

I’m a bit confused by the SEIS comment.

1) I’m not sure why a contractor would need funding when expenses are limited.

2) You have to give up some of the company (ordinary shares) thus giving away income you’ve earned.

3) If you need SEIS funding for the startup then typically you would keep businesses separate to avoid complexity and other ownership issues.

Andrew