**Yes, it is possible to have more than one business under a single limited company by using trading names to create separate units for each business. Each trading name can operate under the same limited company and perform completely different functions. **
How Trading Names Work
A trading name is a name used by a business to brand itself or seperate business functions. This is different to a limited company name, as that is used for legal registration and structure. For example, if the limited company name is ‘ABC Limited’, the trading name can be ‘Alphabet Soup’.
A trading name is often used as the public-facing name of a business; for example Google is a trading name of Alphabet Inc, however, Google is not to only trading name for Alphabet Inc, they also have many other areas of business, such as YouTube or Nest.
Whilst those brands are entirely separate, they all form a part of the overall company, Alphabet Inc.
In the UK you can operate in the same way if that makes sense for you.
Why Have Two Businesses Under One Company Name?
Operating two separate brands or trading names under one limited company may be helpful for many reasons, for example:
- Maintaining a separate identity for each brand- Useful if they are completely different functions, e.g. Photography and Catering.
- Protecting the value of an established or successful brand and developing a new one without damaging its reputation. This can be especially useful where they are in direct competition with each other, but may be seen to offer complementary products and services to different target markets.
- Trademark registrations.
- Removing the need for creating a separate limited company and additional accounting and overheads.
Tax Considerations
Whilst having two separate trading names under one company may be a great idea, it is important to consider the tax implications in doing so.
The most important consideration in the UK is the VAT threshold, currently it is when your total VAT taxable turnover for the last 12 months was over £85,000(source:Gov.UK).
When you are running two businesses as one, you will be combining the trading of both under the same limited company.
This means that if one company is turning over £75k per year and you create a new brand that initially only earns £10k per year, both of these will have to charge VAT to clients and customers.
The Pro’s and Con’s of Using More than One Trading Name
Pro’s
- Separate brands which make sense having different names
- It may be simpler to have just one limited company
- Protect an existing brand from any issues with your new brand
Con’s
- Tax implications, particularly VAT thresholds
- It can be confusing with accounting and sales
- Having all brands under one business can lead to risk exposure should your limited company come into trouble.
Can A Sole Trader Have Multiple Businesses?
A sole trader can trade under as many different names as they wish. They must, however, declare all income in their self-assessment returns each year.
Having a new business doesn’t mean you have to register for self-employment again. Instead, submit one Self Assessment tax return, with a separate section for each business.
The personal allowance you receive will be based on all businesses combined.
FAQs
Do I need separate bank accounts for different trading names?
You do not need separate bank accounts for different trading names if they all come under one limited company. However, this may be helpful to separate the accounting.
Do I need separate bank accounts for different trading names?
You do not need separate bank accounts for different trading names if they all come under one limited company. However, this may be helpful in separating the accounting.
Can you be director of two companies?
Yes, you can be the director of as many limited companies as you like.
What are the rules for trading names?
Your name cannot be the same as a registered business. It must not include Ltd in the name. It cannot be offensive.
Summary
There may be many reasons for having two businesses under one name. However, you must consider the implications of doing this as you may run into tax issues or legal issues.
There are, however, many benefits to having multiple businesses under one, and it can make it a lot easier for you to expand and create new brands.