1 company from 2 existing?
Discussion
I've got a bit of a technical one here for the accountants.
Brief overview...
Company 1. Is one family [husband and wife] makes say £100k profit. Net assets £80k cash
Company 2. Is another family [again, husband and wife] and makes £110k profit. Net assets £30k cash.
Company 3. Is the huband from Company 1 and the wife of Company 2 and makes £20k profit.
What they want to do is all four of them work through company 3, combining their contacts. That's fine, I can deal with that no problem.
Can anyone see any issue in intercompany loans from Company 1 and Company 2 to remove the cash from them (after all liabilities met) and give Company 3 the working capital and then simply strike off those two companies and write off the intercompany loans?
We don't necesarily need the working capital. I wonder if them just retaining dormant companies and leaving the cash in them may be sufficient as something to fall back on if the arrangements don't work out.
Thoughts welcome.
Brief overview...
Company 1. Is one family [husband and wife] makes say £100k profit. Net assets £80k cash
Company 2. Is another family [again, husband and wife] and makes £110k profit. Net assets £30k cash.
Company 3. Is the huband from Company 1 and the wife of Company 2 and makes £20k profit.
What they want to do is all four of them work through company 3, combining their contacts. That's fine, I can deal with that no problem.
Can anyone see any issue in intercompany loans from Company 1 and Company 2 to remove the cash from them (after all liabilities met) and give Company 3 the working capital and then simply strike off those two companies and write off the intercompany loans?
We don't necesarily need the working capital. I wonder if them just retaining dormant companies and leaving the cash in them may be sufficient as something to fall back on if the arrangements don't work out.
Thoughts welcome.
Very carefully drafted shareholder agreements and articles then one of the Cos buys the share capital of the others to combine the 3. Bear in mind if it all goes wrong with relationships within the group (and it often does) you need to have given exits and what happens to shares very serious consideration.
Could one of the Cos be used as a JV vehicle owned by the other two Cos in whatever proportion, with divis sent up to the non-JV Cos as and when. That way, if there's a fall out, you still have assets of each's original Cos in your own hands.
Could one of the Cos be used as a JV vehicle owned by the other two Cos in whatever proportion, with divis sent up to the non-JV Cos as and when. That way, if there's a fall out, you still have assets of each's original Cos in your own hands.
Gassing Station | Finance | Top of Page | What's New | My Stuff