What are the benefits of running multiple businesses under one limited company in the UK?
If you are a freelancer running your business through a limited company and you have a new business idea, it’s good to know that there are many benefits of running multiple businesses under one limited company.
If you have already taken the plunge into freelancing, there’s nothing stopping you from setting up another business. For example, you might have an idea for another business that complements your current area of expertise or you may want to segway into another sector or passion.
You may just want to build a side hustle on Etsy or eBay to boost your earnings. But would you have to go through the loops and costs of registering a new company? The general response from accountants we have spoken to is that you can run multiple businesses under one limited company in the UK.
Here are a few reasons why you might want to go in this direction:
- Reduced administrative burden: By running multiple businesses under one limited company, you can simplify your administrative tasks and reduce your overall workload. For example, you only need to file one set of annual accounts and tax returns, instead of separate ones for each business.
- Tax efficiency: If your businesses are related and operate under one limited company, you may be able to take advantage of tax efficiencies. For example, you can offset losses from one business against profits from another, which can help to reduce your overall tax bill.
- Limited liability protection: By operating your businesses under a limited company structure, you can benefit from limited liability protection. This means that if one of your businesses incurs debts or liabilities, your personal assets are generally protected from being seized to pay off those debts.
- Professional image: Running multiple businesses under one limited company can help to create a more professional image, as it can give the impression of a larger and more established company.
- Flexibility: If you decide to sell or close one of your businesses, it is easier to do so when they are all under one limited company structure. This can also provide flexibility if you want to add new businesses to your portfolio in the future.
It is worth noting that there may also be some drawbacks to running multiple businesses under one limited company, such as potential risks to brand reputation or conflicts of interest between the different businesses. Like most business decisions it is important to seek professional advice before making any decisions. And that’s what you are paying your accountant for, right?