Development business setup
Discussion
I'd be grateful for some advice please. A former colleague and I are looking to do some property development. I am a town planner who also spent a few years working for a developer and he is a construction project manager so we have different but complimentary skills sets.
I work full time so this will mainly be evening and weekend work fir me. He is looking to do it part time, and do PM contract work part time.
There will be projects that we will both do, and some that my partner may do alone (e.g conversions and refurb that doesn't need much or any planning input)
My question is how we set things up legally. We were thinking that we form separate companies for separate projects, and can split these depending on our involvement. It would usually be either 100% or 50/50, but we can see circumstances where that might change, such as how much money we are stumping up etc.
Long term goal is to create one business and both go full time, but we are realistic that that could take at least 5 years (or not at all if it goes badly!).
Thanks
I work full time so this will mainly be evening and weekend work fir me. He is looking to do it part time, and do PM contract work part time.
There will be projects that we will both do, and some that my partner may do alone (e.g conversions and refurb that doesn't need much or any planning input)
My question is how we set things up legally. We were thinking that we form separate companies for separate projects, and can split these depending on our involvement. It would usually be either 100% or 50/50, but we can see circumstances where that might change, such as how much money we are stumping up etc.
Long term goal is to create one business and both go full time, but we are realistic that that could take at least 5 years (or not at all if it goes badly!).
Thanks
Edited by covmutley on Monday 13th December 22:00
I can see the benefit of multiple companies to split shares/profits according to level of involvement, but against that there's the balancing advantages of a single company in terms of ability to draw funds and creditworthyness from one project to the next, and the fact that you'll start to build up a reputation quicker.
First thing I do when confronted with a prospective commercial client is a check on companies house... one-project-wonders and/or multiple companies against a Director's name tend to ring alarm bells.
Then there's the ease of book-keeping and accounts (assuming you'll be working with a lot of the same suppliers and consultants from one project to the next).
In our part-time, start-up stage, we overcame the issue of differing levels of involvement by keeping timesheets and individually invoicing the company for at least some of our time, to bring things back into balance.
First thing I do when confronted with a prospective commercial client is a check on companies house... one-project-wonders and/or multiple companies against a Director's name tend to ring alarm bells.
Then there's the ease of book-keeping and accounts (assuming you'll be working with a lot of the same suppliers and consultants from one project to the next).
In our part-time, start-up stage, we overcame the issue of differing levels of involvement by keeping timesheets and individually invoicing the company for at least some of our time, to bring things back into balance.
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