Join existing ltd company or start of ltd company? not a standard newbie question

**northernladuk** · 14 June 2010, 18:30

Start a new one. Joining your brothers is just a problem waiting to happen. Never mix family and money. You don't say what your brother does but depending who earns most you may need to reclassify the company etc etc..

It is cheap enough to set up so just go ahead and be your own business.

**ddv** · 14 June 2010, 18:38

Originally posted by northernladuk View Post

Start a new one. Joining your brothers is just a problem waiting to happen. Never mix family and money. You don't say what your brother does but depending who earns most you may need to reclassify the company etc etc..

It is cheap enough to set up so just go ahead and be your own business.

thanks for the response;

i've had that thought too. we both do business analysis contracting so I was thinking that a plus point is the ability to reliably back up a right to substitution clause.

anyone else have any thoughts on this?

**Moscow Mule** · 14 June 2010, 19:07

Have a little search around - you'll find more negatives than positives, also just ask Mary Poppins why it's a crap idea. .

Company formation costs <£25 - you might even get an accountant to do it for free.

**northernladuk** · 15 June 2010, 00:54

Originally posted by ddv View Post

thanks for the response;

i've had that thought too. we both do business analysis contracting so I was thinking that a plus point is the ability to reliably back up a right to substitution clause.

anyone else have any thoughts on this?

Surely you can only back this up when one or the other of you is actually out of work. I have yet to see someone successfully use substitution anyway so wouldn't consider that a decision point what so ever. You can substitute with him regardless of your financial situation.

Get your own and keep it all nice and clean

**Scrag Meister** · 15 June 2010, 07:19

Originally posted by northernladuk View Post

Surely you can only back this up when one or the other of you is actually out of work. I have yet to see someone successfully use substitution anyway so wouldn't consider that a decision point what so ever. You can substitute with him regardless of your financial situation.

Get your own and keep it all nice and clean

WHS

Your bro can work for you and you he, even if you are 2 different companies.

GL.

**Wanderer** · 15 June 2010, 07:44

Set up your own company, it's easy to do and will cost about 1200 pounds a year in accountancy costs. Doing this avoids problems should you and your brother decide to take your businesses in different directions, disagree on how the business should be run or cease trading for whatever reason.

If you trade through your brother's company and you are both (say) 50% shareholders then you will split the dividends 50/50 which may not match the income you earn for the company.

As others have pointed out, there is no reason why your two companies shouldn't enter into a business to business arrangement if you need to substitute for each other so you can still work together when you need to.

**d000hg** · 15 June 2010, 08:06

The only time I'd suggest you work for the same company is if you actually intend to go beyond contracting and run a consultancy business together, i.e. a 'real' business rather than a contracting Ltd.

**SackmanandCo** · 15 June 2010, 08:09

If as you say, you are outside IR35, then substitution wont be an issue. Set up your own company. We review contracts for our clients to give an independent opinion

**ASB** · 15 June 2010, 08:16

Even if you should join your brother (which as has been suggested could be problematic) you can't just receive dividends.

Dividends are based on shareholding in the company.

Join existing ltd company or start of ltd company? not a standard newbie question