Using company money for new venture

[newdude55]

Hi all,

im currently working in the IT sector and my Ltd is registered for such business but I wish to try a new venture and hope to use some of the profit from the company to do so.

I know I could create a personal loan but if the venture fails I would not be able to pay it back.

How can I invest money in such a way? Would I have to create another Ltd company and buy the shares in it from my current company?

Im only interested in a small catering venture so wouldn't really want to create a Ltd company to do this (due to costs and admin). Are there any others ways of doing this?

Cheers,

NewDude55

[Jeebo72]

Hi all,

im currently working in the IT sector and my Ltd is registered for such business but I wish to try a new venture and hope to use some of the profit from the company to do so.

I know I could create a personal loan but if the venture fails I would not be able to pay it back.

How can I invest money in such a way? Would I have to create another Ltd company and buy the shares in it from my current company?

Im only interested in a small catering venture so wouldn't really want to create a Ltd company to do this (due to costs and admin). Are there any others ways of doing this?

Cheers,

NewDude55

It's your business, do what you want with it. But note that this changes the nature of your business, poss vat / tax changes etc etc. And if this venture uses suppliers and goes "under" your contractor money is at risk ... still I do it.

[ASB]

Hi all,

im currently working in the IT sector and my Ltd is registered for such business but I wish to try a new venture and hope to use some of the profit from the company to do so.

I know I could create a personal loan but if the venture fails I would not be able to pay it back.

How can I invest money in such a way? Would I have to create another Ltd company and buy the shares in it from my current company?

Im only interested in a small catering venture so wouldn't really want to create a Ltd company to do this (due to costs and admin). Are there any others ways of doing this?

Cheers,

NewDude55

There are loads of ways, but given your requirements simply start the catering venture within your existing company. Buy the product, market it, make some profit (or loss).

But, do ensure that the company articles allow you to embark upon said venture - if not change them.

You might, of course, wish to be trading as "NewDude catering" or similar. No problem, you don't have to register trading names but it might be sensible.

A possible issue is that there is no individual asset pool for each business stream, thus if the catering venture goes down for 50k the creditors can come after any of the business related assets, eg your laptop, future contracting income etc.

It is more common to use a separate company (but you had stated you didn't want to do that). In this case how you fund it is largely up to you. NewDudeCo ltd can happily make a loan to NewDude catering ltd. In default the loan can be written off - it will be important to demonstrate the insolvency of the second venture given the common ownership.

Of course your accountant should be able to details what might be appropriate for your specific circumstances and long term objectives, or at least give you pros and cons of the various ways you could set up.

I would also suggest the search button would yield quite a lot of info given it has been covered quite regularly.

[newdude55]

Thanks for the replies guys.

I have also been advised that I will have to change my VAT scheme (currently on flat rate) and update my SIC code too - this means the nature of my business can only be one type....seems a pain to me

Doe anybody else run companies that offer distinctly different types of services?

[ASB]

Thanks for the replies guys.

I have also been advised that I will have to change my VAT scheme (currently on flat rate) and update my SIC code too - this means the nature of my business can only be one type....seems a pain to me

Doe anybody else run companies that offer distinctly different types of services?

If you believe that because your business has only one sic code that all business streams must be conformant with that code then you are wrong. SIC Code is based on the principal business stream.

You will not have to move off the FRS, though ascertaining the correct flat rate to use could be tricky and might involve you discussing with HMRC (it would normally be based upon the major income stream). Of course there is nothing to stop you using regular vat and it could be in your interest to do so.