How to structure the new business

[DSLiverpool]

Ok it seems the blue touchpaper is lit, the three of us seem to have a viable business model with potential and by the end of this month should have 3 maybe 4 clients plus our own eCommerce vehicle.

However l am stumped for the best way to structure the new business, the three of us have vat reg ltd companies and will be forming a fourth company (newco), this newco will be taking in the cash and covering the (still windowless) office and any bills which is at present covered by my company.

This is where I am stumped, should our existing companies invoice newco say monthly to get cash out (thus growing our individual companies) or should newco pay NI minimum and dividends leaving our companies to stagnate. Or something totally different altogether - yes I will be talking to the accountant but I value the input from you guys so any pointers.

[jammy_basturd]

Form the newco as a LLP.

[DSLiverpool]

jammy_basturd said:

Form the newco as a LLP.

But how to take cash James, let old companies stagnate or keep them alive by drawing income from newco - I am sure its a tax disaster but want know a bit more before asking my accountant.

[jammy_basturd]

You take out the profits from a LLP personally and declare them on your SA. Leaves your LTDs aside from this venture to do with as you please.

https://www.1stformations.co.uk/blog/a-guide-to-li...

[DSLiverpool]

jammy_basturd said:

You take out the profits from a LLP personally and declare them on your SA. Leaves your LTDs aside from this venture to do with as you please.

https://www.1stformations.co.uk/blog/a-guide-to-li...

Nice oh clever one didnt know that but will discuss - cheers

[jammy_basturd]

No worries, a mate of mine (and now also a client) set up an architectural practice with a couple of mates and did it this way and said it works really well for them. I believe it's common amongst architects and solicitors where you have partners in a firm.