Can You Run Multiple Businesses Under the One Company?
Running your own company may mean you want to also run multiple businesses under it. Read this guide to find out how you can do it legally.
When starting your company, you might be wondering whether you can trade under different names. The answer is that you can, and you can also do this in multiple ways. In this article, we’ll discuss how your company can trade under multiple business names. Further, we’ll talk about the advantages and disadvantages of trading under different business names.
What is Corporate Personality?
Corporate personality means that a company is considered legally separate from its owners and directors. Similar to a sole trader, a registered company can do the following:
- Incur debts
- Buy and sell property
- Sue others and also be sued
- Be criminally liable
- Liable in civil matters
However, these things attach to the company itself, not the owners or directors.
Companies were formerly able to trade under multiple names by registering trading names, however this system has since been abolished. Companies can now register multiple business names under their ABN. This means that similar to a sole trader, you can register multiple names to trade under.
Advantages and disadvantages
- Running your businesses under a company can limit your own personal liability
- Registering multiple names means you save on fees from setting up multiple companies
- Furthermore, the businesses may be in related trades or industries and it may make more sense to conflate them
- It might be easier for you to manage if they are under one larger structure
- Your company’s registered name will remain the same
- You company’s ACN and ABN will remain the same for all your business names
- Liabilities of one business name may extend to another
- There may be confusion between business names that operate under the one company
- Tax implications may be less favourable, depending on your business structure
- You may have to lodge multiple tax returns
- You may have to register multiple trademarks
- Depending on which names you use, there may be room for customer confusion
Tax laws apply differently to companies than sole traders. The Australian Government Business website lists these guidelines. Some of the main contrasts are as follows:
- Companies do not enjoy tax free thresholds
- The income rate is different between companies and sole traders
- Companies are taxed separately, not under income tax.
- Some small business concessions are not afforded to companies as they are sole traders
- Sole traders do not need to lodge a separate tax return for their businesses
- Companies may have to pay other taxes
Whilst it is legally possible to run multiple businesses under the one company, it is not without its constraints. It is important that you understand the risks associated. If you are unsure about how best to structure your business affairs, it may be worth consulting a business lawyer for advice.
Another way companies can run multiple businesses at once is if they’re holding companies. It is common for a larger company to own smaller companies. A holding company however, merely owns stock in the other businesses. The companies which are owned by larger companies also have their own legal trading names. A well-known example of this is Google LLC, who’s parent organisation is Alphabet Inc.
There are a few different ways you can run multiple businesses under the the one overarching company. However, you must ensure that the way you’re doing this is legal.
Paul is an intern at Lawpath, and is currently studying a combined Arts/Laws degree with a major in criminology at Macquarie University. Paul has an interest in legal tech, which complements his broader interest in cyber crime/security and the way in which it is changing the world.