Which company formation is better?

[dabaadsha]

say you plan to start severel companies. Is it better to have it under one name or seperate names?

example:

(parent company)
freshgroup.com

(Subsidairies)
freshicecreams.com
freshbakery.com
freshbooks.com
freshproperties.com
freshrentals.com

or
(parent Company)
freshgroup.com

(Subsidairies)
juicyicecreams.com
bakersstreet.com
rightbooks.com
angelproperties.com
uniquerentals.com

the first example will obviously has the has the parent name in the products which is easily connected to the arent company, 'freshgroup'

Customers will know that it belongs to one company which then will make it famous. Quite like how google and yahoo have their products set up. (mail.google.com, Video.google.com, maps.google.com, mail.yahoo.com, Answers.yahoo.com etc)

[Buenchico]

Your other question suggests that you might be thinking of setting up several limited companies. If so, it's worth remembering that every company will have separate accounts and that you'll have to (by law) pay a qualified accountant to audit the accounts of each company every year. So the more companies you set up, the more accountants fees you'll have to pay.

For business operations which are just starting (whether as part of a limited company or run by a private trader) it's probably best to have just one company but with a variety of trading names. So you could have various letterheads (or websites) referring to your various businesses but with a footnote stating that "XXXXXX is a trading name of Freshgroup Ltd. Registered Office: 23A Acacia Avenue, . . ")

'Group' names (such as 'Virgin') only really start to have value when one or more of the constituent businesses becomes a brand name in its own right. For smaller businesses it's probably better to choose a really good name for each of the separate arms of the business.

Chris

[Skyline D]

"you'll have to (by law) pay a qualified accountant to audit the accounts of each company every year. So the more companies you set up, the more accountants fees you'll have to pay. "

With all due respect Chris (not like you) that's utter nonsense.

All companies have to submit company accountants to Companies House every year for public scrutiny and they need to be in a legally defined format. However, an audit is only required where certain conditions are breached, the usual one being a turnover in excess of �6m.

Furthermore, if it doesn't need auditing then there's no requirment for the accountant to be qualified at all or even exist. It's perfectly legal to file your own accounts for a non-auditable company, albeit you better know what you are doing (which dabaadsha clearly doesn't).

[Buenchico]

Please accept my apologies.

When I was MD of a small limited company (in the early 1990s) filing annual returns was an expensive procedure because of the legal requirements which existed at that time. I'd forgotten that the rules were relaxed in 2005.

Chris

[dabaadsha]

Both Chris and skyline D may be experts, but the answers you gave has no relevance to the question. Im totally aware of the accountants feesl Although Chris has elaborated on the topic, i just wanted your opinion on which example will suit better.

dabaadsha

[Skyline D]

Filing Annual Returns, if that's really what you meant, is a really easy procedure. Filing annual accounts, a different thing entirely, which is what I suspect you meant, you need to know what you are doing. You are still miles out on the timing though Chris.

When I started as an accountant in the early 90's ALL companies did require audit, you are right but they started phasing it out for small companies shirtly after. First those with a turnover under �350k were removed, then those under �1m and later it was moved to �5.6m and is now up to over �6m. This all took place way before 2005.

All of which I'll grant you is still nothing to do with answering the question.

Dabaadsha, I never claimed I was answering the question, I was addressing an error in Chris's response. Chris for his part was advising that setting up a number of companies to operate different trade names would be completely pointless and unnecessary. I agree with him.

However, to directly answer the point as regards naming then it would all depend how confident you are in "the brand". There's only a point in the word association of the different companies if it yeilds positive pr. If there's a chance one companies bad publicity could reflect badly on the others you wouldn't want to highlight their connection.