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Joint Venture between two Ltd Companies


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Hi Guys,

 

Another question for you here. I was speaking with an old acquaintance of mine a week or so back and mentioned I was getting into the property game (Flips to start off)

 

Anyway, it came about that he had access to the same amount of funds as me. The general conversation was around joining funds together and splitting everything down the middle including renovation work. I totally trust this guy and know he has a proven track record for his work. (His parents have 16 BTL properties and he does all the maintenance)

 

So...... He has a newly formed Ltd company and so will I in the new year. If we were to join funds together how would we go about purchasing a property for cash?

My thoughts were that he or I would 'loan' the funds to one of the companies and draw up a legal agreement to that affect. When the project is finished he draws out his cash and 50% profit to his business and the remainder stay in mine.

 

I'm not exactly sure how or if this would work but would love to hear your take on it?

 

Speak soon!


Ashley

 

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  • 1 month later...
On 07/11/2017 at 4:17 PM, ashley houlton said:

Hi Guys,

 

Another question for you here. I was speaking with an old acquaintance of mine a week or so back and mentioned I was getting into the property game (Flips to start off)

 

Anyway, it came about that he had access to the same amount of funds as me. The general conversation was around joining funds together and splitting everything down the middle including renovation work. I totally trust this guy and know he has a proven track record for his work. (His parents have 16 BTL properties and he does all the maintenance)

 

So...... He has a newly formed Ltd company and so will I in the new year. If we were to join funds together how would we go about purchasing a property for cash?

My thoughts were that he or I would 'loan' the funds to one of the companies and draw up a legal agreement to that affect. When the project is finished he draws out his cash and 50% profit to his business and the remainder stay in mine.

 

I'm not exactly sure how or if this would work but would love to hear your take on it?

 

Speak soon!

 

 

If it were me, I would set up a new company with you both as directors owning 50% of shares each (or however you agree to cut it up). If your money is already in your own respective limited companies then you can each loan an amount of money to the jointly owned company. That said, I would certainly check with your accountant for his thoughts as I believe if you do a flip in an Ltd rather than joint names then you will be exposed to more capital gains tax. Definitely worth a call to your accountant as what you do will depend on your circumstances......... 

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