Two Businesses

Dottie
Dottie Registered Posts: 99 Regular contributor ⭐
in General accounting discussion
My client has a limited company - IT Consultant. He is going to invest some money in a beauty salon and wants to include this business in the same limited company. Can he do that?

Dottie

Comments

  • slackda
    slackda Registered Posts: 460 Dedicated contributor 🦉
    Is the Beauty Salon Ltd? how much % Share of the bauty salon will his Ltd company own?
  • Dottie
    Dottie Registered Posts: 99 Regular contributor ⭐
    It will be a new business and the company will own 100%. I don't think he can?
  • slackda
    slackda Registered Posts: 460 Dedicated contributor 🦉
    If i remeber correctly he can but it has to reported differently ,it is a while since i looked at any group accounting stuff so excuse me for being rusty.

    I think that there are some IAS's (IAS 27) that cover group reporting, i.e the beauty company will report statutory accounts and the parent comapny will report statutory accounting, with a section that covers the beauty salons income expenditure etc.

    http://www.iasplus.com/standard/ias27.htm
  • qwerty
    qwerty Registered Posts: 82 Regular contributor ⭐
    Group accounts???

    I assume you mean he will carry out both trades via the same company? A limited company can have many different trades (provided this is allowed via the Memorandum of Association).

    Therefore two trades in the same company is allowed. There may be restrictions on the use of losses for tax purposes if there are any (although I cannot see this being the case for an IT consultant!)

    Also, if it was a subsidiary, there would be no need to prepare group accounts if the group would be classed as small, which I suspect it will be.
  • Dottie
    Dottie Registered Posts: 99 Regular contributor ⭐
    That is exactly what I meant!

    Thanks for your advice.

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