Different business activities using ame ltd co?

**malvolio** · 25 April 2007, 09:39

You can but it can cause complications, although probably not as many as when dealing with a totaly separate partner. It would be sensible to run two bank accounts and two separate P&Ls (so you can see which side is making what money and to keep the VAT posiotion clear) then accumulate them into one General Ledger for year end and CT billing purposes.

It also assumes the company name is suitable - would you buy a DELL babygro or a Mothercare laptop? Perhaps trading names should be reviewed...

There are no problems with accountants, BTW, that is FUD put about by certain vested interests who are looking at their own livelihood going up in smoke. High St accountants and SJD and anything in between are perfectly safe.

**scooterscot** · 25 April 2007, 09:43

I remember when I applied for the flat rate scheme I was asked by the revenue what kind of business I was in ’Management consultant’ I said. I’m not so sure what they’d do if they found out otherwise, you may put your core business in jeopardy and loose the flat rate, but I don’t know. Also remember why you have the flat rate because as a service you don’t buy much raw material so you could not claim VAT? However I’d imagine the business would need to procure material for clothing.

**Vito** · 25 April 2007, 09:45

I wouldn't do it that way...

What happens if your wife's business is a huge success and she wants to prime it for a sale in a couple of years time?

What happens if your side of things is profitable but your wifes part goes belly-up and builds up debt...anyone owed money could get their hands on your cash.

How about if you want to close one of the companies in two years time for tax efficiency reasons?

On the other hand...I suppose that if your wife doesn't get near the higher rate of tax but does contribute as much in terms of effort as you, you might get away with having 50% of the company each and taking equally dividends for tax efficiency...

Personally I would keep it seperate for the pretty insignificant sums involved in running an additional company...

**malvolio** · 25 April 2007, 09:46

That's why I said you need different P&Ls - different businesses are allowed under FRS but as you say the percentages can be different as well. Or if you're not on FRS, you still need to track it properly - for instance, aren't some kids clothes zero rated?

**philip@wellwoodhoyle** · 25 April 2007, 10:47

Unless you have a realistic expectation of either company doing particularly well (well enough to be sold on) or particularly badly, just go with one company having two trades. You can always unravel one into a new separate company in the future if it goes well and you want it separately in anticipation of a sale.

You don't really need two bank accounts nor two sets of accounts.

Just set up your current (hopefully) simple book-keeping into cost centres or departments - off-the-shelf software like quickbooks does this very simply. Then a bill or sale can be put to the normal expense/income account, but also "tagged" to one or other business. Then you can pull off reports "by business" to achieve what is needed being analysis by business.

It also makes things easier for transfer of money between one "business" and another. The reality of it is that husband/wife will be transferring and supporting eachother - if one goes belly up, the other spouse will have to support anyway, whether different businesses or not (if you are to remain happily married!).

If you have two companies, you have to deal with everything properly. Just one example, if you share a broadband connection, whichever company that pays it would have to invoice the other - lots more examples of "duality" are obvious.

The costs savings of just one company compared with two will be high enough to accept the risks and complications of two. Only one accountant, one company formation fee, one annual return, potentially only one insurance, one data protection licence, etc etc.

As a practice, we have recommended (obviously giving the pros and cons) one company for more than one trade for several years and have never yet had a problem that couldn't be solved quickly and cheaply. In fact, our experience is that most of the "second" trades don't amount to anything and are soon forgotten.

**Lewis** · 25 April 2007, 10:47

Originally posted by Denny

'Lappy & Nappy Services Limited'

**marcosscriven** · 25 April 2007, 11:14

So far as I know, there's nothing to stop you using different trading names, so long as on your literature, website etc, you state "Baby Clothes is a trading name of Acme Holdings Ltd)

Most people will think in terms of the trading name, not Acme Holdings.

As long as you keep your own view of the P&L separate, it doesn't matter too much if it all goes through one set of books.

**Lewis** · 25 April 2007, 14:08

Thanks for all your replies. Lewis.

**DimPrawn** · 25 April 2007, 14:13

Originally posted by WHA

Unless you have a realistic expectation of either company doing particularly well (well enough to be sold on) or particularly badly, just go with one company having two trades. You can always unravel one into a new separate company in the future if it goes well and you want it separately in anticipation of a sale.

You don't really need two bank accounts nor two sets of accounts.

Just set up your current (hopefully) simple book-keeping into cost centres or departments - off-the-shelf software like quickbooks does this very simply. Then a bill or sale can be put to the normal expense/income account, but also "tagged" to one or other business. Then you can pull off reports "by business" to achieve what is needed being analysis by business.

It also makes things easier for transfer of money between one "business" and another. The reality of it is that husband/wife will be transferring and supporting eachother - if one goes belly up, the other spouse will have to support anyway, whether different businesses or not (if you are to remain happily married!).

If you have two companies, you have to deal with everything properly. Just one example, if you share a broadband connection, whichever company that pays it would have to invoice the other - lots more examples of "duality" are obvious.

The costs savings of just one company compared with two will be high enough to accept the risks and complications of two. Only one accountant, one company formation fee, one annual return, potentially only one insurance, one data protection licence, etc etc.

As a practice, we have recommended (obviously giving the pros and cons) one company for more than one trade for several years and have never yet had a problem that couldn't be solved quickly and cheaply. In fact, our experience is that most of the "second" trades don't amount to anything and are soon forgotten.

Disagree. I did this (ran IT Contracting and other business) through the same ltd. It was a nightmare to unravel. Don't do it. I had 5,000+ bank transactions to split, piles of receipts, direct debits, two lots of PAYE, two lots of profit margins.

Setup a new limited and new bank account and keep them 100% separate. Clean, easy to track, easy to sell, easy to close, easy to grow.

Different business activities using ame ltd co?