Use of company by two people with different income streams

Use of company

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Hi,

Sorry if this is a silly question- I and my wife currently work as sole traders in different but related fields (her in the music publishing business, I in specialist musical instrument retail). I am interested in setting up a company and my question is whether the same company could serve for both of us, or whether if she wanted to incorporate she would need to set her own one up as it is a different (although distantly related) field. 

Thanks in advance for any thoughts

Tom

Replies (3)

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By Accountant A
26th Oct 2016 10:35

You can generally do what you like (as long as it's legal). Whether it's commercially or tax optimal will be something that you should discuss with your accountant.

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Stepurhan
By stepurhan
26th Oct 2016 10:38

There is nothing legally to stop you doing this.

It might be inadvisable for other reasons. These include:

If one business gets in trouble, the assets of the other are at risk of being seized.

The combined turnover of both businesses will be used for VAT registration purposes. You might end up having to charge VAT on both, even though each separately are well below the limit

If you are equal shareholders (presumably the plan) you will be equally entitled to dividends from the combined profits. If one business does well and one does poorly, is there a risk of resentment arising from a 50/50 split of unevenly generated profits.

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By bernard michael
26th Oct 2016 10:59

In your situation I would always advise 2 companies for the reasons previously stated.

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