Company name under Limited Company?

lego101

Hi, I'v recently began in setting up a new business ( On-line Store ).
I'm now looking at what type of company I'd like to be registered as, I see limited as the most beneficial. Helpfully, my parents also own a limited company at the moment and I'm looking to trade with the new business name under their company. I understand the process of setting up a new company, but not joining myself with another and various Google searches haven't given me a clear answer. Also for added information, the limited company is only trading in the form of a rented premises at the moment, so one predictable income on that side.

The main things I'm wondering at the moment:

Is it possible to trade with my business name under their company name after I'm added as a director?

When you register as limited company now, you must give them a 40 word description on your main purposes, now that I have added to the company, these purposes will likely change, how does this work?

...........................................

If anyone can help with these question's I would hugely appreciate it, again I have tried to research all these problems and couldn't find an answer myself.

srsly78

Ask their accountant. Will probably involve amending the articles of association or something like that.

lego101

Thanks for the quick reply! Also meant to mention that I will be talking to an accountant soon, just thought I'd check if anyone here has insight on these problems so I could be more prepared!

pedroeibar1

lego101 wrote: »

Thanks for the quick reply! Also meant to mention that I will be talking to an accountant soon, just thought I'd check if anyone here has insight on these problems so I could be more prepared!

Tell the accountant what you want to do. Then stop talking and listen. That is what you are paying him/her for. You also need to discuss with your parents what they will permit. One of them (the company's active one) should also attend the meeting at the accountant with you to save time, as they need to understand it also. TBH your post indicates that you are totally unaware of what the implications are (there are many that affect you, your parents, your activity and their business), so 'good call' to see the accountant.

The Dagda

lego101 wrote: »

Hi, I'v recently began in setting up a new business ( On-line Store ).
I'm now looking at what type of company I'd like to be registered as, I see limited as the most beneficial. Helpfully, my parents also own a limited company at the moment and I'm looking to trade with the new business name under their company. I understand the process of setting up a new company, but not joining myself with another and various Google searches haven't given me a clear answer. Also for added information, the limited company is only trading in the form of a rented premises at the moment, so one predictable income on that side.

The main things I'm wondering at the moment:

Is it possible to trade with my business name under their company name after I'm added as a director?

When you register as limited company now, you must give them a 40 word description on your main purposes, now that I have added to the company, these purposes will likely change, how does this work?

...........................................

If anyone can help with these question's I would hugely appreciate it, again I have tried to research all these problems and couldn't find an answer myself.

Why do you want to trade under your parent's limited company?

Why not set up your own?

srsly78

Just guessing but trading under their umbrella would save a lot of setup and admin costs. Not having to hire an accountant for example

The Dagda

srsly78 wrote: »

Just guessing but trading under their umbrella would save a lot of setup and admin costs. Not having to hire an accountant for example

How much to setup a new limited company?

pedronomix

lego101 wrote: »

Hi, I'v recently began in setting up a new business ( On-line Store ).
I'm now looking at what type of company I'd like to be registered as, I see limited as the most beneficial. Helpfully, my parents also own a limited company at the moment and I'm looking to trade with the new business name under their company. I understand the process of setting up a new company, but not joining myself with another and various Google searches haven't given me a clear answer. Also for added information, the limited company is only trading in the form of a rented premises at the moment, so one predictable income on that side.

The main things I'm wondering at the moment:

Is it possible to trade with my business name under their company name after I'm added as a director?

When you register as limited company now, you must give them a 40 word description on your main purposes, now that I have added to the company, these purposes will likely change, how does this work?

...........................................

If anyone can help with these question's I would hugely appreciate it, again I have tried to research all these problems and couldn't find an answer myself.

Using a different trading name within a single Ltd company is not at all unusual. You just register the business name with the CRO with the owner being the Ltd company. It must legally trade as "xyz Ltd trading as Donkey Treats" or "Donkey treats is a trading name of xyz Ltd"

The ownership will be that of xyz, all assets and liabilities will belong to xyz. It will be a single tax/accounting entity and unless you are intended to end up owning the complete entity, probably a complete mess. The price of structuring your new business correctly at this stage will only be a fraction of the possible costs to sort it out etc in the future. Get proper advice from an accountant as to how best structure it taking in all the factors and intentions.

pedroeibar1

pedronomix wrote: »

Using a different trading name within a single Ltd company is not at all unusual. You just register the business name with the CRO with the owner being the Ltd company. It must legally trade as "xyz Ltd trading as Donkey Treats" or "Donkey treats is a trading name of xyz Ltd"

The ownership will be that of xyz, all assets and liabilities will belong to xyz. It will be a single tax/accounting entity and unless you are intended to end up owning the complete entity, probably a complete mess. The price of structuring your new business correctly at this stage will only be a fraction of the possible costs to sort it out etc in the future. Get proper advice from an accountant as to how best structure it taking in all the factors and intentions.

The OP wants to carry on 'his' business within the framework of the Ltd entity owned by his parents (not him) which as you correctly point out is not possible - it will be the business of Ltd Co. The main issue is separating the business activities of the OP from those of the Ltd company. Should he screw up, not pay suppliers, breach any laws, he, unless he is seen as a shadow director, can walk but the directors of the Ltd will be on the hook, as will the credit rating of the Ltd Co.

lego101

Thank you for all the replies!

In regards to 'pedroeibar1' , they're fully permitting of me trading under their name, and yes I am unaware of the implications of what I asked, hence why I asked the question. But thanks for the advice, and yes one director will be present!

in regards to 'The Dagda' , I am setting it up under their name because it will 1) Save me a-lot of upfront costs 2) We already have a trusted accountant for this company and 3) As the company is only open for the income of the rent, too much money is being spent to keep the company open, such as the Tax returns at the end of the year. So to keep things cheaper for both parties we decided it could be beneficial to both run under this company. Setting up a new company can cost between 400-700 euro at the moment.

in regards to 'pedronomix' , I don't personally think the tax returns will be a mess. I will be trading with only 6 suppliers and the other business has only a single income on it's return. But thanks for clearing things up!

and finally too 'pedroeibar1' again, I think my last point might clear this up a little bit. But to restate, the only other business under the LTD company is a premises which has ceased trading but is now let, and that is the only other activity in the company. I don't understand why it is not possible to carry out my business inside of the limited company? I understand that my taxes will be done with the company and that my assets will be held inside the company and that I will need to be listed as a director. Thanks again!

Thank you for all your help here, I really appreciate it. It's Beginning to seem like some people would recommend setting up a new limited company, could this possibly be better even with the circumstances of the other businesses?

pedronomix

I was not talking about the tax returns, I was referring to the the taxation position if at any stage you wished to or indeed had to move "your assets" out of the company. Though now that you say the company has rental income that is treated differently by revenue too!!

If you have a trusted accountant in place, why post this on here at all. He would also have the benefit of knowing the exact detail of the existing business.

dbran

Hi Lego101

I would not be recommending putting the business into the same company as the property. The simply reason being is that if the business is not a success and it makes losses and incurs liabilities, then the property will be put at risk and any gains made in its value will be eroded or lost. This is probably your parents nest egg so it is important that this does not happen.

The sensible thing to do is set up a separate company for the new business and in that way ring fence the property against any losses by leaving it alone in its own dedicated company.

It only costs perhaps €300 plus VAT to form a company and it is a cost well worth paying in this instance.

Best regards

dbran

pedroeibar1

lego101 wrote: »

and finally too 'pedroeibar1' again, I think my last point might clear this up a little bit. But to restate, the only other business under the LTD company is a premises which has ceased trading but is now let, and that is the only other activity in the company. I don't understand why it is not possible to carry out my business inside of the limited company? I understand that my taxes will be done with the company and that my assets will be held inside the company and that I will need to be listed as a director. Thanks again!

I'm with DBran and the other pedro on their advice above.
What I meant was that you do not have a business 'under the Ltd co.' - because the Ltd Co is a legal entity and you are not (as described by you.) Your parents are the directors of the Ltd Co and as such have a fiduciary duty to it and are on the hook legally for any 'errors'. The Ltd co (and not you) would have to be invoiced/issue cheques/payments/whatever. As the Ltd is holding a property asset there are tax implications for it. Even if the 'activity' was conducted through the Ltd Co there is no need for you to be a director. The list goes on.............listen to the professional advice you will get at your meeting.
Best of luck with your venture