Same Limited Company for different trades

[san99]

Hello,

I am an IT contractor and planning to setup a limited company soon.

My wife is thinking of starting a business of selling garments online and local from home. Initially she will be starting as a Sole Trader but later as the business grows she might have the need to use a limited company for her business.

I have the following questions please:

1. Can we both use the same limited company (for IT and garments trading)?

2. If the above is yes then does the name of the Limited company matter. Like for example will it matter if I use a name related to 'fashion'?

3. If yes for 1 then should both use the same business account?

Many Thanks & Regard
San

[Craig@Clarity]

Hi San,

1. You can use the same limited company and have several trading styles under the limited company name.
2. Not particularly although you probably want to think about not naming it San IT Consultancy Limited if it's trading as San Fashion. You can call it San Limited (or similar if available) so that you use it as San Limited t/a San Fashion (if that makes sense)
3. You should have any income going into a limited company name bank account although you're not restricted to one accounts, so you could have 2 accounts where one is called San Limited t/a San Fashion and the other as San Limited t/a/ San IT.

Other things to think about for the future is the VAT aspect if you decide to put both companies under the same roof e.g. under the fashion side, you may want to claim VAT back on stock but it would me charging VAT to private individuals which means looking at your selling prices. In addition, you would then have to compare this to the flat rate VAT scheme and what benefits you could be losing out on.

[Clare@InTouch]

Repeated above!

[MarillionFan]

Hello,

I am an IT contractor and planning to setup a limited company soon.

My wife is thinking of starting a business of selling garments online and local from home. Initially she will be starting as a Sole Trader but later as the business grows she might have the need to use a limited company for her business.

I have the following questions please:

1. Can we both use the same limited company (for IT and garments trading)?

2. If the above is yes then does the name of the Limited company matter. Like for example will it matter if I use a name related to 'fashion'?

3. If yes for 1 then should both use the same business account?

Many Thanks & Regard
San

(1) Technically yes, but it is not recommended. Needs to be shown as two revenue streams on the accounts. In addition you may already be VAT registered, and for a startup business you are best to stay under the threshold(it is more profitable) until you need to register. If you merge you automatically are VAT registered.

(2) See 1

(3) See 1 again.

I would recommend the following setup.

Wife sets up as self employed, not VAT registered. The business will then be part of her self assessment. If you need to, you can pay her a salary which will reduce your corporation tax and profits. Then the cost of any stock you purchase will go as an expense against her directly. She will not be able to claim back VAT until she registers, but at the same time she won't have to pay it, so it's worth a few grand. Your LTD could also make a 'loan' to her.

Then if it takes off you can move into a Ltd(if she really needs to) and you keep them seperate.

If you are clever you can engineer a very tax effective set of benefits using a LTD and self employed status.

[MarillionFan]

Hi San,

1. You can use the same limited company and have several trading styles under the limited company name.
2. Not particularly although you probably want to think about not naming it San IT Consultancy Limited if it's trading as San Fashion. You can call it San Limited (or similar if available) so that you use it as San Limited t/a San Fashion (if that makes sense)
3. You should have any income going into a limited company name bank account although you're not restricted to one accounts, so you could have 2 accounts where one is called San Limited t/a San Fashion and the other as San Limited t/a/ San IT.

Other things to think about for the future is the VAT aspect if you decide to put both companies under the same roof e.g. under the fashion side, you may want to claim VAT back on stock but it would me charging VAT to private individuals which means looking at your selling prices. In addition, you would then have to compare this to the flat rate VAT scheme and what benefits you could be losing out on.

[san99]

Many thanks to all.