merging two local shops

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oaky9

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i run two shops in the same town selling the same product under two separate companies. the two businesses do very well but could i merge them into one company. i would save 3500 on accountants annually and save loads on bank charges what other advantages or disadvantages would this bring and would it be advisable
 
One of the companies could buy the shareholding of the other for a nominal sum and would then take on the assets/liabities of the 'target' co.

In the long run it will lead to savings but in the short run you will need your solr./accountant to carry this out for you and they will be looking for a fee-it will involve extra filings with cro to advise cro of the situation.

But what you are proposing makes sense in the long run and you could still,if you wished maintain seperate bank accounts for both shops,which can be prudent if it is a high cash flow business(abc no. 1 a/c,abc no.2 a/c)

But talk to your accountant/solr first.
 
In the process of doing the same but I am a sole trader, projected sales not as high but major cost savings regarding staff and once stock from shop a is sold I should have a cash balance to see me through 6 months.
Am lucky that the lease in shop a is ending soon and am expecting my large deposit back
 
Just be careful you don't open up an opportunity for someone else to open in place of the second shop. If someone were to open up now they would in theory get only 1/3 of the trade which might not be enought to tempt the in, but if you shut up one shop then in theory they would get 1/2 of the trade, this might be enough to tempt them in.

Michael
 
Michael,
I think the poster's intention is to keep the 2 shops open but have 1 company for both,at least that is what I took his post to be about.
Keeping both shops open would be important as you point out from competition point of view.
 
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