Start new business or wait until extension

[Sar78]

I have found a new investment opportunity that I am keen to get involved in. However, the amount of investment that the business will require in terms of capital and manpower is significant. My current business has not failed, it is doing ok, but at the current rate, it will only begin to break even in two or three years from now.
In choosing to invest my remaining investment between the two, I would pick the new one. However, there is a problem. My extension comes up very soon in a few months, and I don't know whether it is better to stick to the existing enterprise and invest in it entirely (same business that I made the initial application with), or go with this new opportunity. I read that HO prefers you stick to your original investment plan.

Also, do I need to provide management accounts right to, say, a month before application, even if the final investment was made a few months beforehand?

[seasky]

Where does it say that HO prefers you stick to your original investment plan?

So you are asking if to make a bad investment (in your eyes) just for extending the visa. Just some points to think about:

1. How much are we talking about £5000 left to invest (yeah get the extension simply) or £195,000 (that's a lot of money to invest in a less optimal business)? or anywhere in between
2. Will your older business support your ILR (will it continue to employ 2 people for a year?)
3. Will your new business support ILR?
4. Will both/either of these businesses pass the genuine entrepreneur test?

[Sar78]

Where does it say that HO prefers you stick to your original investment plan?

So you are asking if to make a bad investment (in your eyes) just for extending the visa. Just some points to think about:

1. How much are we talking about £5000 left to invest (yeah get the extension simply) or £195,000 (that's a lot of money to invest in a less optimal business)? or anywhere in between
2. Will your older business support your ILR (will it continue to employ 2 people for a year?)
3. Will your new business support ILR?
4. Will both/either of these businesses pass the genuine entrepreneur test?

Thank you for replying to my post.

In the MAC report, it was noted that far too many extension applicants were setting up new businesses that had nothing to do with the fields that they were originally involved in at the time of the initial applications (or their businesses were not linked to the business plans that were submitted). They raised it as a red flag to an extent.

As for the amount of remaining investment- it is about £30K to meet extension requirements, although the new opportunity will require about £80K over the year.

I do not view the current business as a bad business opportunity. The existing business is doing ok and as such I do think it has a future; it is just that comparatively it does not have the same potential in terms of revenue generation in the longer term. I could say that it is a fairly stable option though. Moreover, continuing the business would enable me to show business growth over the past three years.

Yes, my current employees will continue in the existing business provided I get an extension. The new business will also meet the employment requirements, should I go with that option.

Finally, as for the genuine entrepreneur test, the current business is legitimate, and the new opportunity is legitimate, too. However, I believe this test is subjective, and therefore I am not quite sure whether I can evaluate the business on the basis of this test, as it is down to the caseworker's opinion?

[seasky]

Where does it say that HO prefers you stick to your original investment plan?

So you are asking if to make a bad investment (in your eyes) just for extending the visa. Just some points to think about:

1. How much are we talking about £5000 left to invest (yeah get the extension simply) or £195,000 (that's a lot of money to invest in a less optimal business)? or anywhere in between
2. Will your older business support your ILR (will it continue to employ 2 people for a year?)
3. Will your new business support ILR?
4. Will both/either of these businesses pass the genuine entrepreneur test?

Thank you for replying to my post.

In the MAC report, it was noted that far too many extension applicants were setting up new businesses that had nothing to do with the fields that they were originally involved in at the time of the initial applications (or their businesses were not linked to the business plans that were submitted). They raised it as a red flag to an extent.

As for the amount of remaining investment- it is about £30K to meet extension requirements, although the new opportunity will require about £80K over the year.

I do not view the current business as a bad business opportunity. The existing business is doing ok and as such I do think it has a future; it is just that comparatively it does not have the same potential in terms of revenue generation in the longer term. I could say that it is a fairly stable option though. Moreover, continuing the business would enable me to show business growth over the past three years.

Yes, my current employees will continue in the existing business provided I get an extension. The new business will also meet the employment requirements, should I go with that option.

Finally, as for the genuine entrepreneur test, the current business is legitimate, and the new opportunity is legitimate, too. However, I believe this test is subjective, and therefore I am not quite sure whether I can evaluate the business on the basis of this test, as it is down to the caseworker's opinion?

Just being creative here. Can the new business be setup as a subsidiary of old one? Can old one just start doing the "business" of the new one? Can you very clearly in the covering letter make the entrepreneurial case for moving into this new business.

My very humble opinion is that this is so close to extension and the HO are not entrepreneurial experts at all they might have a hard time understanding this transition. BTW are you sure business A is strong enough on the genuine entrepreneur story (it seems you only invested £20k and now artificially investing £30k just before extension)

[Sar78]

Where does it say that HO prefers you stick to your original investment plan?

So you are asking if to make a bad investment (in your eyes) just for extending the visa. Just some points to think about:

1. How much are we talking about £5000 left to invest (yeah get the extension simply) or £195,000 (that's a lot of money to invest in a less optimal business)? or anywhere in between
2. Will your older business support your ILR (will it continue to employ 2 people for a year?)
3. Will your new business support ILR?
4. Will both/either of these businesses pass the genuine entrepreneur test?

Thank you for replying to my post.

In the MAC report, it was noted that far too many extension applicants were setting up new businesses that had nothing to do with the fields that they were originally involved in at the time of the initial applications (or their businesses were not linked to the business plans that were submitted). They raised it as a red flag to an extent.

As for the amount of remaining investment- it is about £30K to meet extension requirements, although the new opportunity will require about £80K over the year.

I do not view the current business as a bad business opportunity. The existing business is doing ok and as such I do think it has a future; it is just that comparatively it does not have the same potential in terms of revenue generation in the longer term. I could say that it is a fairly stable option though. Moreover, continuing the business would enable me to show business growth over the past three years.

Yes, my current employees will continue in the existing business provided I get an extension. The new business will also meet the employment requirements, should I go with that option.

Finally, as for the genuine entrepreneur test, the current business is legitimate, and the new opportunity is legitimate, too. However, I believe this test is subjective, and therefore I am not quite sure whether I can evaluate the business on the basis of this test, as it is down to the caseworker's opinion?

Just being creative here. Can the new business be setup as a subsidiary of old one? Can old one just start doing the "business" of the new one? Can you very clearly in the covering letter make the entrepreneurial case for moving into this new business.

My very humble opinion is that this is so close to extension and the HO are not entrepreneurial experts at all they might have a hard time understanding this transition. BTW are you sure business A is strong enough on the genuine entrepreneur story (it seems you only invested £20k and now artificially investing £30k just before extension)

Thanks again for your advice.

Yes, I actually spent way more than that. It's just that initially we were having issues with the bank, so I ended up spending a lot from my personal account for the business. I know that the money should be shown with a bank transfer, that is why I am going to transfer the amount even though I have invested way more than £20K already. As for salaries, the revenue generated is enough to meet them. Thank you for the alternative suggestions, I will think through them. I was wondering, is it acceptable if the director is actively involved in the running of two businesses? Or can you only take an active role in one, but at the same time be involved with 2+ businesses?

[legalkhan]

You people are making things difficult for yourselves, the policy guideline clearly says that they, the Lords(H.O) understand that we applicant could close the original business we have got the visa for due to some reason and moved to other business as long as you still have all the accounts/investement documents of the old business with you. doesn't matter if you do so after one year or in the last 3 months before your extension date. Please be realistic and logical, how could u stick to a business that is not generating enough or getting the better opportunity some where else, then why wouldn't u go for it. The basic things the Home office interested in is that 1) You being director of a company for the last 3 years (NQF=or > level4)
2)2 people employed for 12 months each
3) All the fund has been invested with proof either in one or more businesses of which you are director in each and every one of them either in past or existing one.

That all H.O is interested nothing esle.

[seasky]

You people are making things difficult for yourselves, the policy guideline clearly says that they, the Lords(H.O) understand that we applicant could close the original business we have got the visa for due to some reason and moved to other business as long as you still have all the accounts/investement documents of the old business with you. doesn't matter if you do so after one year or in the last 3 months before your extension date. Please be realistic and logical, how could u stick to a business that is not generating enough or getting the better opportunity some where else, then why wouldn't u go for it. The basic things the Home office interested in is that 1) You being director of a company for the last 3 years (NQF=or > level4)
2)2 people employed for 12 months each
3) All the fund has been invested with proof either in one or more businesses of which you are director in each and every one of them either in past or existing one.

That all H.O is interested nothing esle.

I am far from an expert, only having gone through my visa/extension but there is the genuine entrepreneur test now (wasn't there when I first applied) and that means they can and do look subjectively at would you actually do (not sure how the bureaucrats have the tools to figure it out, but that is a separate discussion). As such the just 'hitting the numbers' is NOT enough for extension.

[zimba]

I am far from an expert, only having gone through my visa/extension but there is the genuine entrepreneur test now (wasn't there when I first applied) and that means they can and do look subjectively at would you actually do (not sure how the bureaucrats have the tools to figure it out, but that is a separate discussion). As such the just 'hitting the numbers' is NOT enough for extension.

I have not heard people being refused extension because of the genuine test yet. It seems that they are nit picking over documents at the moment, so they are trying really hard to make refusals based on missing/wrong documents.

[legendfar]

My question is slightly related to this topic, the business with which i got the initial grant, in 2013 but as soon as i got my visa i started working on other business never invest any money never registered that company name with HMRC never created any job with that business, but the business i started i am following all the policy guidance. Do you guys think should i mention this in my covering letter or not
thanks in advance

[zimba]

My question is slightly related to this topic, the business with which i got the initial grant, in 2013 but as soon as i got my visa i started working on other business never invest any money never registered that company name with HMRC never created any job with that business, but the business i started i am following all the policy guidance. Do you guys think should i mention this in my covering letter or not
thanks in advance

It is fine. something similar is clearly mentioned in the guide:

98. We recognise that,as an entrepreneur,you may have moved on to other activities and no longer be involved in the business in which you initially invested, but we still require this evidence to show that the money was invested.

[legendfar]

Hi Zimba
Thanks for your reply this guidance telling that show the evidence of investment but i didnt do any investment on that business name whatever i invested , i invested in current business
but it seems that i should mention in the covering letter something like that i got the initial visa on that business but i didnt invest and changed the business , what do you think should i ?

[seasky]

My question is slightly related to this topic, the business with which i got the initial grant, in 2013 but as soon as i got my visa i started working on other business never invest any money never registered that company name with HMRC never created any job with that business, but the business i started i am following all the policy guidance. Do you guys think should i mention this in my covering letter or not
thanks in advance

I moved on from original business to new business. I thought it was prudent to mention it in the covering letter with a brief explanation of why. I was extended without questions on this or an interview needed.

[zimba]

Hi Zimba
Thanks for your reply this guidance telling that show the evidence of investment but i didnt do any investment on that business name whatever i invested , i invested in current business
but it seems that i should mention in the covering letter something like that i got the initial visa on that business but i didnt invest and changed the business , what do you think should i ?

Nothing really There is no such a thing as 'I was given visa on a business' in Tier 1E. You are allowed to be the director of as many companies as you wish. The requirement for extension really does not prevent you from moving on to another business

[legendfar]

Hi Seasky
Thanks for your reply it looks you mentioned in your covering letter that you moved to other business..


Hi Zimba
thanks for your reply
according to policy we can changed the business but my question should i mentioned myself or let them assume if they check my previous initial grant application but as Seasky said its prudent to mention, and seasky got extended it means Seasky must have mentioned. So its better to mention.