merging companies

I am a director of 2 companies and I was thinking of merging the two companies together due to decreasing turnover in one of the companies.

The companies are both very viable but if I merge the two into one I will only have to pay one audit fee which would make a saving of 4k.

If i proceeded would i have to put the company in voluntary liquidation of what process is required and is it expensive.

When merged I think it would make both businessess stronger.

No, you could go for strike off, but first, why not ask your auditor to drop the fee or put the assignment out for tender, if that is the only reason for this consideration.

You should get professional advice from your accountant or other tax advisor on this.

First of all, most small companies are exempt from audit. Are you referring to the accountancy fee or are they actually doing an audit?

There are two separate issues - merging the companies and merging the businesses.

You should probably do whatever is the best for the businesses, rather than be led by the company structure.

You could merge the businesses fairly easy in practice. Set up one accounting system but account for them separately within that system. But it's probably better to merge the companies as well.

Company A can buy the shares in Company B from you. Company B could then transfer its assets to Company A and Company B could cease trading.

Or Company A could simply buy the business of Company B from it - this would probably be simpler.

It is important to note that they are separate companies legally, and if you sell assets from one to the other, it must be done at market value.

Do bear in mind, that separate companies may have certain advantages in the future. You may wish to give shares in Business A to an employee of A, without giving them a share of Company B. Separate companies make this easy.

You may wish to sell one of the businesses, and separate companies would be useful here as well.

But as I say, get good business and tax advice from a good accountant.

Brendan