westredd started this topic @ 16:45 on 27/11/2006
hi,
Im English and lived in brazil with my brazilian wife. while we were there we had the idea of exporting leather goods. we found some factories and got samples and prices etc. It was hard to get people to buy from the uk while we were in brazil. Now that I am back in the UK I am thinking about possibly starting up a company and importing the goods directly here from the sources we researched in Brazil., then going out and selling them as a wholesaler to shops etc. I would also like to continue doing contract IT work and would like a limited company to do this.
Is it possible to use 1 company for 2 different lines of business completly? Or is the only way to have 2 limited companies for this?
cheers
RE: Starting up a business for 2 purposes
James Smith | 27/11/2006 05:07 PM
You can do this but it might cause a problem with several issues such as VAT (you would need to have the same status on both businesses, and things like the flat rate scheme become difficult), equitable allocation of funds between parties (ie you and your wife especially if you are caught by IR35) and also there would be an issue if later on there was outside investment in your export business and you have both activities going on. From a tax point of view losses on one business couldn’t be offset against profits on the other so you would essentially need to keep separate of both activities for tax purposes.
So yes you can do it, but be careful and make sure you take proper advice BEFORE you start so you don’t end up causing yourself some problems further down the line. I do actually have quite a few clients with multiple activities in one company but you need to be careful.
Hope this helps,
Regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
