Starting a LTD company with friends, worth it?

[jmo21]

Terrible idea IMHO.

What are the chances one guy might drag the others down?

Maybe he is not quite as good technically, or terrible at interviews.

What if one guy consistantly doesn't get as much work?

It's a nice idea, but unless, as others say, you are trying to start a real consultancy and bringing in other money earners (eg. cheap permies, contractors, building a product for repated sale) then there are so many things that could derail this.

What if one guy is off sick for 6 months, or can't work for some other reason?

[Wanderer]

You should all set up separate LTD companies but keep in close contact and sub contract work to each other's companies as and when needed.

Co-incidentally, subcontracting work makes a nice IR35 defence too.....

[JoJoGabor]

I know people who do this. They have formed a LLP (limited liability partnership) and have setup a profit share to split the money in a fair way which is linked to how much income each person generates.

My thought is it will help with some of the new IR35 tests as the company can prove it advertises, there is more chance than they have lost money due to a non payment of an invoice at some point, maybe more. I guess the bigest part of it is they market themselves as a consulting company so substitution and bringing in others is more likely

[BlasterBates]

You can also setup your own office share advertising, even possibly employ a secretary or a an IT graduate to help out. if there's enough of you, all these things would be too costly for an individual but if you get together you would be able to do this.

I would suspect that you could more easily setup your business so that you pass the real business test, which would mean that you wouldn't have to have your contracts reviewed in detail.

Another advantage is that you would be able to use contacts and bid for projects, i.e. you're not a one man band you are a real co.