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Partnership with other company

Only for UK Tier 1 (Entrepreneur) points system. This route is now closed to new applicants.

Moderators: Casa, John, ChetanOjha, archigabe, CR001, push, JAJ, ca.funke, Amber, zimba, vinny, Obie, EUsmileWEallsmile, batleykhan, meself2, geriatrix

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FSD
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Partnership with other company

Post by FSD » Wed Nov 30, 2016 11:36 am

Dear forum members we are two team members on Tier 1 Entrepreneur migrant visa already running a business under our company. We are going to apply for extension after a couple of months and we have met almost all requirement. We have got a very good business opportunity as another establish company is offering a partnership through a partnership agreement. We shall not be signatory of that company’s bank account. Is this good idea to join by making a partnership as we also want to show that business not for profitability but also for credibility of our business? Currently we have only one business currently in loss so we need your expert opinion.
Thank you very much

noajthan
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Re: Partnership with other company

Post by noajthan » Wed Nov 30, 2016 12:24 pm

Business in loss or profit is immaterial in context of Tier 1.
All that is gold does not glitter; Not all those who wander are lost. E&OE.

FSD
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Re: Partnership with other company

Post by FSD » Wed Nov 30, 2016 2:20 pm

Thank you for your reply one thing more as if our company makes a partnership with other company and money is invested in that company in the form of DL for buying stock (not good will or assets), shall we be able to claim points for that investment? Secondly does HO accepts this two companies partnerships as both parties want to remain part of their own companies.

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zimba
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Re: Partnership with other company

Post by zimba » Wed Nov 30, 2016 2:52 pm

FSD wrote:Thank you for your reply one thing more as if our company makes a partnership with other company and money is invested in that company in the form of DL for buying stock (not good will or assets), shall we be able to claim points for that investment? Secondly does HO accepts this two companies partnerships as both parties want to remain part of their own companies.
What ?? Buying another companies shares is not DL, it is simply purchasing part of another company and it is NOT acceptable for award of points.
You can only do this if you are a director in the 2nd company and invest money in that company personally (via DL or shares)
Advice is given based on my personal research and experience only. Do NOT contact me via private message for immigration advice

FSD
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Re: Partnership with other company

Post by FSD » Wed Nov 30, 2016 3:16 pm

Thank you zimba88 we do not want to purchase shares but to buy stock as the business is retail store. we want to invest by buying stock (stuff for selling) and work there as well as business is already generating profit. i know that buying shares, goodwill, assets and any investment going to previous owner are not acceptable investments. So both parties want to make a partnership agreement and investment will be transferred as DL to purchase the stuff (stock) to resell. hope you get the point and sorry for any inconvenience.

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zimba
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Re: Partnership with other company

Post by zimba » Wed Nov 30, 2016 3:33 pm

Thank you zimba88 we do not want to purchase shares but to buy stock as the business is retail store. we want to invest by buying stock (stuff for selling) and work there as well as business is already generating profit. i know that buying shares, goodwill, assets and any investment going to previous owner are not acceptable investments.
I am sorry, what ???? Buying stocks is buying shares in another company, usually a public one !!
You are also NOT allowed to work in a business you are not a director of under Tier 1E rules !
So both parties want to make a partnership agreement and investment will be transferred as DL to purchase the stuff (stock) to resell. hope you get the point and sorry for any inconvenience.
You do not seem to understand the definition of director's loan, do you ??? Money injected in a business by a DIRECTOR of a business is called a Director's loan. Injecting money in another business via your company is NOT.
Advice is given based on my personal research and experience only. Do NOT contact me via private message for immigration advice

FSD
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Re: Partnership with other company

Post by FSD » Wed Nov 30, 2016 9:25 pm

Thank you zimba88 for your reply and i am sorry for not being able to clarify my query. You and other respected forum members are very helpful and i appreciate that. Our company ABC is doing its business and we have invested £ 180000 in this company via DL (From our personal accounts to company business account with reference DL and then paid to third party creditors). ? is this ok

Now we want to start a second business so for this purpose we are in communication with other company XYZ to be part of their running business because they are looking for someone to contribute in the business by money and work. We have discussed with our lawyer and his best suggestion is to become the director of other company as well (i believe the best solution) but the problem is other company do not want to do that. Company XYZ’s director wants to make a partnership with our company ABC as he does not want us to be director of his 12 years old company XYZ.

My question is that if our company makes partnership with company XYZ but the investment we made would be the same way as we did for our business as we shall first transferred money from our personal bank account to our company ABC bank account, then in favor of third party creditors. Sir method of investment for this new business would be DL as we did for our company but only difference is we are not directors of company XYZ but are partners. Our company ABC will pay to the third party creditors up to decided investment (£ 25000) for the partnership business.

Our lawyer has given us this suggestion as last option if do not become director of company XYZ. Make partnership agreement and then invest from company ABC’s bank account in favor of third party creditors for the business run by company XYZ, being partner. Would it be an investment for our company ABC .
I know this is complex situation and i am also struggling to understand. Your valuable answer will be helpful as i and my partner are planning for our extension application in Feb 2017 (after two months).

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zimba
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Re: Partnership with other company

Post by zimba » Wed Nov 30, 2016 10:01 pm

I understood your situation very clearly initially and my answers remain the same. You are trying to find a way to effectively invest your money in another business and work for them, treating Tier 1E visa as a poor man's Tier 1 Investor visa.
Your understanding of concepts like DL or Third party creditors is very poor, so as the rules and purposes of Tier 1E visa.

Injecting cash into another company XYZ without being their director will NEVER EVER EVER EVER is considered a directors loan. You really need to understand that :!: You MUST become the director of XYZ company to give that company a Director's Loan. Given that you get shares in return for your cash, such investment will NOT be acceptable for the purpose of investment under Tier 1E rules as you are cannot use your investment to purchase a business or part of a business in the form of shares, stocks, etc.

A third party creditor is an entity that lends money to YOUR company not the one that borrows from you. A credit card company or a loan company or a bank that gives YOUR COMPANY money is a third party creditor. Lending money to another business makes YOU a third party creditor in that business.

Purchasing part of another company which you are NOT a director and working for them are clearly against the rules of Tier 1E visa.
Advice is given based on my personal research and experience only. Do NOT contact me via private message for immigration advice

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