Some Business Advice Needed

[James2612]

Hi All,

Earlier this year i started a limited company with 2 others, all is going well and we have started a 2nd project. Its a website that we plan to sell in a few years time. We will be using the profits from business number one pay for the website.

My question is, should this website be a separate company? As we plan to sell the website i assume we should have it as a stand alone company. If thats what we do, can we take money out of business 1 and give it to business 2??

Any help will be great.
Thanks

 

[Scalloway]

Can you identify all the costs and income from the new website? Is it worthwhile opening a separate bank account fro someting that is just costing money?

 

[James2612]

Hi Scalloway,

Thanks for your reply.

To start with, the website will just cost money. After a few months it should start making money too. I suppose what i am trying to work out is which would be the most convenient way of setting this up. As its own company or apart of the original one. The only reason i ask is because we want to sell it in a few years, but we want the profit from business 1 to pay for it at the beginning.

Is it easier for business 1 to pay money into business 2

or

Is it easier to sell "Part" of a business?

Thanks

 

[James2612]

Also Scalloway - If i was to keep this all under one business, would you advice a separate bank account for the website even tho the costs and profits will be easy to identify?

Thanks

 

[Christine Hough]

I am inclined to keep it as one.Yes, I would think, you could sell the site and associated business even if part of a larger organisation.

If it were a separate limited business, selling it would be selling the shares and appointing new directors. So you could do that if the income were worth it.

But I would keep the income from the site in a clearly separate and identifiable way. Say a unique paypal account if all the income is from online.

 

[James2612]

If it were a separate limited business, selling it would be selling the shares and appointing new directors. So you could do that if the income were worth it.

Thanks Christine,

So if it was all under one company, would there be any issues in selling just that part?
If its one company, we wouldnt want to sell shares we would want to just sell the site. So would this site be an "asset" to the company? Would any money made from the site technically be profit of company 1?

 

[Christine Hough]

I would think it would be quite OKay to sell a part of the business but I am not an expert.
What you would be selling?

• The website URL and track record.
• Its 'goodwill'
• The contacts/ suppliers etc.
• The turnover - you would need to be able to prove this

 

[James2612]

Thanks Christine - You are right, when we come to sell the website we will be selling just that along with any support documentation and contacts / suppliers!

You have laid this simply and made it clear that i dont think i need to set up a company for this website.

Thanks again Christine

 

[ThePublisher]

You just need to keep clear accounts which show the revenues and costs attributable to each part of your business in order to be able to show somebody in the future a true set of figures. If you have Sage accounts or something similar, you just need to set up separate codes and be disciplined in coding things up properly. Don't forget to also account for your time.