Company "trading as"

[MannyA]

I have a part of my business that is proving quite successful, but I can’t market it too hard as this would be detrimental to the image of the main company.

I want to separate it from the main business with a different name, different branding etc which would give me the opportunity to properly market it. What I don’t want is the hassle of setting up another company and the admin and paperwork that comes with it.

My accountant seems to think that I can simply come up with a name (having checked no one else is using it) and set it up as a new division of the my company as long as I make it clear on invoices etc that it’s my company “trading as” the new company.

Is it that simple? Any one on here doing it?

 

[Drhildr]

More or less - have an EGM, ask the bank to set up the trading style on the account, disclose the fact that the business name is a trading style on all documentation and that is more or less it. We have at least 3 different entities trading through one Ltd company on this basis

 

[KnickeRS]

What David above and your accountant have said are both fine, but if you are worried about there being a link between the new product and possibly your name being linked to it also, then you may need to go the new company route with someone else (trusted of course) listed as the shareholder anyway. The seperate company route will take only minutes for an accountant to establish in this day and age so that is painless, but the pain is running two (or more) companies if they are small companies anyway, as your profits will be divisible between the whole if a link can be shown, plus of course two sets of y/e accounts, two sets of employers liability insurance and so on and so forth.

Obviously, you'll do whats right for you but I did end up in this situation through acquisition and in late '07 rolled it all back into the one umbrella company that then got renamed to make life far easier for myslelf, which it has been !

I think the decider has to be, what's at stake. I have friends in business that due to the nature of their market place and what they do (selling aftermarket alloys, car accessories etc), worry about the trading brand having any shown assetts for fear of a legal issue wiping them out later. From my case, this would never concern me as my only concerns are keeping the bank happy who have it all wrapped up in security anyway !

 

[MannyA]

Thanks for the responses.

Not too worried about there being a link between the companies as its nothing Sinister, the problem is that we are a Project Management Consultancy managing multi £Million construction projects, the business is 5 years old and has a decent reputation, however last year was pretty tough so we started getting involved in smaller property management stuff which is actually proving to be quite lucrative. I want to seperate it from the main business with its own website and develop it.

Property people are quite snobby and I dont want developers and their banks looking up my Project Management consultancy and assuming we are just a glorifed maintenance company!

The trading as thing seems to be a good way forward

 

[Shimmy]

Sounds like a sensible decision manny. Easy to do and easy to keep separate in the public eye meanwhile maintain links for ease of accounting, employment and insurance.

Only trouble comes if you want one to either be sold or go insolvent then you wil wish they had of been totally separate but the businesses seem similar enough not to worry about that

 

[Biscuits]

Actually sounds like it could work very nicely... the smaller "trading as" company could actually trade off it's bigger brothers reputation, but "cater for the smaller projects, blah blah" publicly... keeping the original company for the big corp jobs.

Good luck

 

[SimonRS]

I did this in the past, main business was well established with new enterprises possibly diluting brand. As KnickeRS points out, multiple companies gives taxation problems, unless they all make similar net profit.

I had one company with multiple business names, on the letterhead footer it stated "x is a division of xyz ltd"' then the company registration number and VAT number. Personally I don't like "trading as", but it depends on your industry and brand.

 

[Shill]

different companies shouldn't give tax problems if managed properly

separate company means less hassle if you want to flog it, although that can be sorted if you haven't split it

suspect it won't make much difference either way but i would go separate personally. cleaner

 

[gaz]

I agree. Trading as, (and this hopefully doesnt sound snobby) sounds 2nd rate. We have 3 companies, none trading as. Make a clean break from your main business, no arguments can then surface if conflict of interest or any ambiguous areas arise.