Multiple online businesses, name issue

[Hedgie]

If you have several online businesses is it better to have one 'company' name with the various businesses having their own trading names or just set them all p as seperate businesses?

The issue of bank accounts springs to mind, would you need a seperate account for each business if you trade seperatly?

[David Griffiths]

The main reason for having separate companies is to manage risk - if one business becomes insolvent and is closed then it won't drag the others down with it. It's probably more relevant if you are taking on long term commitments such as leases or hire contracts. I don't know what kind or size of businesses you are talking about, but generally online businesses don't have high fixed costs (premises for example, and possibly staff) so the risk is low. The other big risk is bad debt, and I'm guessing that most online businesses get paid cash with order, so don't give credit.

That should mean that if you keep decent records you can monitor the results of each division and quietly close one down if it's not doing well enough.

The other factor that might point to multiple companies is ownership - if you wanted to bring in a business partner or have an incentive for employees. Again the employee incentive is pretty rare for any small business.

If you run as one company, you can arrange with the bank to accept cheques made out to different trading names. Guessing again, but will most of it come via debit and credit cards, which isn't an issue?

The single company approach means that all profits and losses are effectively pooled, so losses in one reduce tax in another. That can be changed with a group structure, but that just adds a layer of complication. There are other drawbacks if one company starts to do particularly well in that it might hit the higher rate of company tax at a lower level depending on the number of associated companies.

As you'll see, there are a few assumptions in there. The main question to ask is "what are you trying to achieve, and where do you see things going?" With that in mind you can get advice tailored to your specific circumstances, and it probably wouldn't be a good idea to set up multiple companies without taking proper advice first.

[Jheath]

We have a Ltd co name (which can be anything at all more or less) then we have divisions which have different trading names with different websites. That way, for accounting purposes everything is under one roof. The trading performance of the divisions / profits / costs etc are only in our management accounts of internal use. As long as eery website and every invoice / letterhead says something like (yourtradingname) is a business name of (yourLtdCoName) or something like that. I've also seen something like: wotsit.com - part of the Thingumy Ltd group of businesses.

In our case, all resources are shared, so we keep costs down. How you aportion costs in your management accounts is up to you. My advice is however you chose to do it, be consistent.

You'll need to tell the VAT man about your trading names, if you offer consumer credit you need all the trading names on your OFT license. Also, your insurance company should be told about your additional trading names.

Hope this helps and good luck!

[Mark_anderson]

I'd suggest you to have a one company name for all the services, this will knot your businesses and you can express it easily. Besides, you don't need to named every business specifically.