Incorporation, Business Names and Start-up Issues

Dear all,

I am about to start a new business and intend to incorporate from inception as I am a PAYE worker and will be making more money in my job (taxed at marginal rate), need the prestige of a Ltd company and will be incurring VAT input costs. The NewCo will be an online media company which has a number of brands.

My thinking on structuring the business is to register a company, call it NewCo Ltd. and have multiple trading business names (all registered using the RBN1 at the CRO). These will be separate entities but will all share the same type of website but branded differently and the income will all accrue to NewCo Ltd.

So to summarise: NewCo Ltd.
Owns: BusinessName1, BusinessName2, BusinessName3...

My question is as follows:

a) any tax issues above? is it possible? is it contravening any tax law?
b) why do people/companies set up various different companies when they could do it this way (if this way is possible).
c) would there be any problems if I had to sell BusinessName1, etc in the future?
d) any other issues above?

Thanks for any advice, help, pointers.

A. No tax problems really, all invoices must say NewCoLtd T/a Bus Name 1 etc
B. related to C
C. If you try to sell business name 1 it will be shares in the company you are really selling so you would have to sell the lot, or spin bus name1 into a separate company however I wouldnt buy a company if that was the case, hence the reason that some people set up different companies (answer to b hopefully)
Also If Bus Name 1 is a success & bus names 2 & 3 are dismal failures having the 3 in separate ltd companies means that failures wont poison the successes, assume you dont do much intercompany trading of course.
Having 3 ltd companies also triples your cro & accounting requirements and perhaps costs

Straight answer. The only true way of protecting a business name is incorporate it. Registering a business name is practically worthless. So NewCo Ltd t/a XYZ will not stop XYZ Ltd.

And this is the key here for you.

Thanks for the replies.

Spinning business name 1 into a separate entity would probably trigger a CGT liability. Anyhow, this is all theoretical, there is nothing to suggest that any of the businesses would be successful so I don't think it is worthwhile worrying about this at the moment.

You are right that incorporating each entity is the "right" way to do it BUT if you are a start up, with an unproven concept, have little capital, need the benefit of a Ltd. co., and want to prove the concept, well then having one Ltd. company with a few business names hanging off it for a couple of years is probably cost effective from an admin and CRO point of view.

Nonetheless it is an interim solution if each of the individual "businesses" or brands are successful.

Agree?

I don't think spinning business name 1 into a company would trigger any CGT. Its value is currently worthless, isn't it?

The CRO fee is €20, set of dormant accounts would be very basic and all tax returns are €NIL (with some backround data required in CT1 return). All of these you can do yourself or go to an accountant and he will do it for €500 or so.

Am I right in thinking your main concern here, is protecting the 'company names'? If so, you can't protect them by registering business names.

Thanks for all the comments.

Re: CGT... maybe no value but the intention is that they would have a value. They are essentially a brand with sales and therefore an intangible value. However this is neither here nor there at this stage.

Re: Dormant accounts etc. Do you know where I might get a basic set of statutory accounts pack and a sample spreadsheet of all the stuff required for the Revenue and CRO? I find all of this very confusing and very eager to do it myself rather than pay an accountant for what I should be able to do myself.

Re: Main concern is not protecting the company names (although this is important through RBN1, dot.ie domain name registration etc.) but getting started up (and incorporated) in the most efficient way possible when you have a number of small side businesses that you want under 1 umbrella.

OnetoOne,

I totally understand that you might like to do these yourself and save €500. Ask yourself this question - do you know what a 46G is and how to update the company register? Have you had a directors meeting during the year and an AGM to approve the accounts?

When you have a company, unfortunately you have Company Law and Revenue regulations. And unless you know exactly what you are doing, I would recommend getting an accountant. That way, at least you can point the finger and you can get on with driving your business etc forward.

Maybe you could get it done this year by an accountant and consider doing it yourself next year.

Regards
Patrick