Company Investments

When presented with the opportunity to invest either a regular monthly/annual amount out of cashflow or a one off lump sum from retained profits, there are a substantial number of options available to a Limited Company. So much so that the easiest thing to do is to do nothing, leaving it simply to sit in what is often low interest bearing bank or building society account.

Whilst cash can offer some benefits to investors, and indeed regularly plays a part to a lesser or greater extent in our clients’ portfolios, as a long term strategy this could be considered detrimental.

There are a number of factors that need to be considered when considering an alternative investment -

• What is your company’s objective and when might it need the funds? – This will revolve around whether the investment is for income or growth, whether access is required, how long the company is prepared to invest for and perhaps whether more complex planning is involved, typically Corporation Tax Planning.
• What is your attitude to investment risk? – How risk averse are you and what is your view of volatility?
• What investment vehicle/wrapper is the most appropriate for the circumstances?

You may clearly be able to answer and elaborate on the first issue. However, with regards to investment risk and to which type of medium a company should invest through, these are not so easily determinable. We consider this to be an area where professional and independent financial advice is imperative.

In the meantime, we have prepared information that you can access in our company investment section which, whilst not exhaustive, will provide a useful guide to the options available.