Purchasing Shares Through a Company

I own a company that isn't to do with investment at all. It is a cleaning business that I started this year just before Covid. I was wondering whether it is legal / doable to invest in shares under the company name. I understand there may be a little less tax involved paying the company rate instead of the individual rate but it is mainly to invest together with my business partner.

The company is a 50/50 ownership.

 

Yes you could, but that doesn't mean you should

 

If the cleaning business goes bust, what happens?

 

Haha...

Is the downside here just the obvious though?

ie. held in company structure, if the friend and I have some sort of falling out, its locked up in a business (if we make profits), etc

 

I am assuming we just pay whatever we owe to the staff and to the business etc and can still keep the company name. We would maybe get charged a bit more during tax time though because its for a company maybe.

 

No flexibility if you hold shares.

 

Bad idea.

I’m no lawyer but running a business comes with many risks. Why would you put a passive investment such as shares at risk by holding them in a active business that comes with many risks.
Not advice but I would look at having the shares of my company that operates the business owned by another company that then invests in shares. Or even better a trust that owns the shares of the company that owns the shares of the company that operates the business.

if that makes sense. What I would do though is get professional advice first. Such structures could be worth while but it really depends on the value of the assets and investments you will hold. Having multiple companies / trusts does start to get costly.
Having the wrong structure could be more costly.

 

relevant:

Legal Tip 288: Structuring the Ownership of Shares in a Company Legal Tip 288: Structuring the Ownership of Shares in a Company