Common Control

Common Control

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Can someone explain Common Control in a simple terms, does this restrict one person from having more than one limited company?

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Portia profile image
By Portia Nina Levin
25th Apr 2015 15:37

(No subject)

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By Jonrich
19th Mar 2015 13:06

Thanks, is it called common control as I cant find anything useful when I search the web for it

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By johngroganjga
19th Mar 2015 13:11

Common control is the relation that subsists between entities that are under the control of the same person or group of persons.

There are no rules (in this country at least) that limit the number of companies that a single individual can have. I trust you realise that Portia's response was tongue in cheek. 

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By Jonrich
19th Mar 2015 13:31

Ha yes I did.  But does it

Ha yes I did.  But does it stop them doing anything if there is common control?

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By johngroganjga
19th Mar 2015 14:05

Yes there are rules here and there in the tax field that, in effect, treat separate companies under common control as if they were a single company. If you like, those rules prevent individuals from obtaining advantages from having multiple companies which would not be available if they only had one.

But these are generalities. What is behind your question?

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By Jonrich
19th Mar 2015 14:11

Nothing much just more interest and that I have a client who likes to keep opening companies but not actually doing anything with them

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By User deleted
19th Mar 2015 14:22

Fools and their money ...

.

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By Jonrich
15th Apr 2015 09:40

Coming back to common control, so could someone not open a second ltd co to put a different trade through? For example one was stone masonry and one for stone cleaning, the main reason is because it may put him above the vat threshold if all in one

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Replying to Lone_Wolf:
By johngroganjga
15th Apr 2015 09:53

Artificial Separation

Jonrich wrote:

Coming back to common control, so could someone not open a second ltd co to put a different trade through? For example one was stone masonry and one for stone cleaning, the main reason is because it may put him above the vat threshold if all in one

Yes someone could open as many companies as they like, and run as many different trades through them as they have time for. There are no rules.

But if the reason to do so is an attempt to avoid having to register for VAT that may not be effective because of the artificial separation rules that have already been drawn to your attention. So if they fall foul of those rules, which are there for obvious reasons, multiple companies can be treated as one for VAT purposes.

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By mrme89
15th Apr 2015 09:44

As Portia said, you can't be greedy when it comes to opening companies.

 

Also Google "VAT Artificial Separation".

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By Jonrich
15th Apr 2015 10:10

Thought as much, thanks for your help.

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