Plan B - Setting up another ltd company

[mailric]

Thinking of setting another company up, but not sure whether to set up a completely new company myself, seperate from my current ltd co interest. Or, set it up under (so its 'owned' by) my ltd co.

Its basically a bright idea i've had during a dull day in the office so will likely loose me the plan b fund. So assumed tax breaks on any losses and expenses covered before tax etc?? (but you never know, this time next year.... )

Would welcome your thoughts on the pro's and con's of each approach?

[TykeMerc]

I'd be inclined to keep it as a separate entity until it's a success, you can then always sell it to your other Ltd as a going concern.

[mailric]

Good point.

But was thinking it would be more of a failure really (thats the spirit eh!), hence write off losses through myco and any expenses incurred come out of profits of myco rather than mypocket?

[TykeMerc]

Good point.

But was thinking it would be more of a failure really (thats the spirit eh!), hence write off losses through myco and any expenses incurred come out of profits of myco rather than mypocket?

That's ok and sensible so long as you're sure that PlanB Ltd won't accrue liabilities that could critically damage your MyCo, that's why I suggested keeping it apart.

[mailric]

Another good point.

Are there any benefits to running it under myco?

[Alan @ BroomeAffinity]

Another good point.

Are there any benefits to running it under myco?

As you say, the expenses associated with Plan B can be paid out of your ltd co and if it makes losses these can be offset. Other than that:

a) you might save accounting fees;

b) Depending on how much profit you make in either company, you could pay MORE corp tax if you split them: As these would be deemed associated companies, the smaller companies tax threshold would be halved for each company, meaning that if either of the companies made profits exceeding £150k, then you'd have to pay 30% on some of the profits. This wouldn't apply if both businesses were under the same company.

[DonaldG]

What about setting up a limited liability partnership (LLP)?, your ltd could be a partner in the LLP, along with yourself.

The LLP wouldn't be an associated company, but it all really depends on your circumstances, and why you want to set up a different company - not sure i fully understand?

[mailric]

mmm, food for thought. 'bout time I made my accountant work for his money i think.

thanks for the pointers. gives me some topics to question him on (i'm not convinced I'm getting the best advice - time to test him)