thinking about starting a business with my brother

[dave123]

I'm currently a year in to an IVA and I'm thinking about starting a business with my brother but want to know if this will affect my IVA.

I'm still in my normal day job so will make my usual payments to the IVA. The business is only likely to make profits of £5-10k per year.

It will be a limited company with both my brother and I being shareholders but I won't be taking a salary or dividends from the company whilst still in the IVA.

Can my creditors force me to hand over any profits from the business?

[MelanieGiles]

Hi dave123 and welcome to the forum

There is no problem with starting a business with your brother, but do make sure that you declare this to your IP so that they are aware of this. If the company does make profits, then this will be treated as additional income, unless you can put up a good case for the need for those profits to be reinvested back into the business.

Best to seek advice on this point from your own IP, who will probably ask to see the limited company's accounts at the end of each year.

[Cybus]

A new business has set up implications - the main one of course being costs. How is the business to initially be funded? Who will be the directors (Bear in mind your financial position)

I think you're going to have an obligation to disclose profits that you make. I may be wrong but even though it may be a Limited Company, there may still be tax liabilities arising on a personal level.

What is going to happen to the profits?

If at the moment it is going to make profits of only £5K to 10K per year, and you're already not taking any salary or dividend from it, then is better to not get involved in the business until after the IVA is concluded as it does not appear to be able to sustain two salaries anyway?