splitting the company

[daniel thorne]

Hi,
I have a company that makes display stands, exhibitions and shop fitting furniture we have always made sure we can supply the smaller companies as you never know what they may turn into later down the line. recently however because of our large contract it is getting harder and harder to do this.

we have the space to set up another division within our existing site but I want to set it up as a completely independent division with its own email, phone line, staff, invoicing, purchasing and bank account. This division can then focus on bespoke and specialist items and leave the bigger runs to the other side of the company. This being said I do not want it to be a separate company. I want the accounts to be done as one and there may be times where each division is used as an overflow for the other.

Is this possible to have 2 bank accounts for the same company in my head it would just be like having a PayPal account as well as a bank account but im sure it may be a lot more complicated than that.

Would it be better to start another company? im worried about doing this tax wise as one side pays for the unit and i don't think the new division would make enough to cover the size of unit we have. and it may just look like we have done it as a tax dodge which is not the case.

Can you see any other problems I may not have thought of?

Thanks for taking the time to read this and any advice is greatly appreciated.

 

[john1989]

What about keeping everything under the same company but setting up cost centres within your bookkeeping package. This will allow you to keep track of how each division is doing.

If the nature of one division being more risky than the other, it might be worth operating as two different companies. You wouldn't want one division pulling both divisions into insolvency.

 

[daniel thorne]

The reason I wanted separate bank accounts is so one does not take the funds from another. The 2 "companies" will be run by different directors so their budgets will come from their sales not from just what is in the overall bank account.

To be honest they are both as risky as each other but they may work together with internal jobs on a regular basis so having it as individual companies may make that stage a lot harder.

 

[Carl Mintern]

Why not start 2 new companies, each owned by the current one.

I'm not the guy that knows the jargon, but the term umbrella company, or holding company spring to mind.