Trading 'as' or seperate Ltd Company

[SS HSV]

I currently have a limited company which is ticking over. I have seen another opportunity which I think represents a true 'hole in the market', although it is not related to my existing business. I have bought the domain name for it, built a web site and researched the day to day running and management side and I am ready to start trading theoretically.

My question to the knowledgeable is this:- I do not know whether I should form another limited company in that name and thus inherit twice the running costs, or buy the company and park it and then 'trade as' under my original company name? The big picture with this is that I do not want to sell and install the products that this company supplies, I want to sell the whole affair as a franchise opportunity and provide leads, bonded stock and PR and support to the franchisee's.

My accountant is climbing the Himalayas as we speak so is not available to comment

Any pointers greatly received.

edited for terrible Monday typos

Edited by SS HSV on Monday 30th April 12:39

[Eric Mc]

You can use your current dormant/ticking over company under its current name but apply a "trading name" to the trade itself i.e. XYZ Ltd t/as ABC.

If your company ends up carrying on two separate trading activities, it will need to differentiate its Profits and Losses from the two activities (if the differences are material). This is both an accounting and tax requirement.

There are special (and quite complicated) tax rules over the utilisation of losses in one trading activity against the profits of another.

[ATG]

Not knowing my arse from my elbow, but I'd have thought the considerations would include, would you want the same shareholders/board members for both business activities? What about segregating the risk? If both business activites are within one Ltd, then if one business activity creates a huge loss, the whole lot goes bust, whereas keeping the companies separate would allow one to fold without effecting the other. Memorandum of association might need to be ammended if the existing one wouldn't cover the new business activity, but I imagine that is easily sorted. Extra cost and admin, versus greater flexibility ... guess it will vary from case to case. Someone who knows their arse from their elbow will no doubt be along to give some sane advice. Good luck with the new venture!

Oh look, sane bloke already turned up.

Edited by ATG on Monday 30th April 12:49

[SS HSV]

Thanks guys, as I already have a tried and tested admin procedure in place and the new business is not in any way connected with the first it is looking like it will have to be an entirely new and seperate affair. I had hoped that I could save some accounting fees by running both as one, but the more time I throw at it the more glaringly obvious it has become. The bank rang me back this afternoon and advised me the same, so that that then.

Here we go.. again