I've been running a UK Ltd company which does two separate things under two different trading names. One is a service and one involves stock of which there is around 10k worth in value.
The time has come to split these two enterprises into two so the idea is to make another Ltd company, each one then focussing on their specific area rather than one company doing both disparate things which has become very unwieldy.
My question is this: for various reasons which need not concern us, the 10k stock needs to be in the new company. What is the best way to transfer this? Presumably I can't just 'give' it to the new company (or myself and thence to the new company? I am the sole director and shareholder).
Ideally I'd like to somehow take possession of these assets myself and then input these to the new company. Is this possible?
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one company doing both disparate things which has become very unwieldy.
Can you describe in what sense the arrangement is "very unwieldy" and how doubling up on banking, tax and accounting helps? Is the company VAT registered?
You just pay yourself a dividend of £10k of stock, pay tax on your £10K dividend and sell the stock to company B for £10k, which is left outstanding as a debt to you.
Can't see the point of paying the tax on it, but if that's what you want to do...
of course you cannot just give it away to the new company or take it away - the asset is not yours ( you are separate from the company ) the simple answer is Company A will be selling the asset ( inventory ) to Company B , there other complications involves as it seems you are trying to dispose part of the business to another entity (company B) , this brings so many other questions in the mix .... seek proper tax advise.
That's one of the reasons you need to speak to a decent accountant. They will solve such problems in seconds.
I imagine the overall answer is "dont have a second company", and just deal with the complexity in a less dramatic manner. Eg better bookkeeping and possibly two bank accounts.
Yeah but there are solid reasons for it.
Great. Can you elaborate?
Are you VAT registered and is the plan for both companies to be VAT registered?
No, neither are. The second one might eventually be. Does it impact things?
Depends entirely on the circumstances.
Could you detail the rationale for the proposed split.