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Multiple Businesses under one ACN - Need advise

Discussion in 'Business & Startup Investing' started by Deep1, 24th Sep, 2016.

  1. Deep1

    Deep1 New Member

    24th Sep, 2016
    Hi everyone,

    I am planning to start business and plan is to gradually expand into 3 different businesses:
    1. Consulting
    2. IT
    3. Cafe


    1.Can I have all 3 under one company name i.e. ACN?
    2. In case, I may need to include someone for IT business or one of the 3 businesses of the
    company, is it possible under same structure of 1 company?

    Please advise.

  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    9th Jun, 2005
    Sydney, Australia
    This would be a great question to ask over at BusinessChat :: Australian Business and Startup Forums :D

    You can do whatever you like under the one company name / ACN - there are lots of "diversified businesses" out there.

    You can even have multiple business names (trading names) registered to the same company structure (so "Deep1 Pty Ltd trading as Deep1 Consulting", "Deep1 Pty Ltd trading as Deep1 IT Services" and "Deep1 Pty Ltd trading as Deep1 Cafe"). They would all be on the same tax return, so are basically the same business with three separate "fronts".

    The question is - would you want to?

    If your consulting work gets the business into legal trouble, do you want your IT work or your cafe affected by it?

    If a customer at your cafe slips and injures themselves and your insurance won't cover it completely for some reason - do you want that to affect your IT or consulting businesses you've worked so hard to build up?

    If you one of your businesses ends up being hugely successful or you get an offer you can't refuse to sell it, or you find someone you really want to go into business with for that part of the business - it would make it far easier if that were operated as a separate business.

    Similarly, if your cafe ends up struggling and you want to sell the business as a going concern, that's much more problematic if it's a part of your IT / consulting business.

    I'd seriously look at the option of keeping them separate - yes, it will increase your costs and your admin work a bit, and there are other implications you'll need good advice on, but it will potentially save you a lot of heartache down the track if they genuinely are separate businesses.

    FWIW, I currently operate 4 separate businesses, will probably start my 5th next year.

    My structure is I have a consulting company which employs me and provides services to my other companies. My consulting company invoices my other companies so profit from all the other companies flows to my consulting company, which then pays my salary and covers most of the shared costs across the various companies.

    This isn't necessarily the best approach for you and it does cost more than doing it all under one business - but it's something to consider because it gives me flexibility as I grow and each business is isolated from the others.
    Terryw and pinkboy like this.