A
aph257
I weighing up starting business and to which way to go self employed. Limited Company or Sole trader? your comments please.
Thanks
Thanks
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M
mikethetile
if its just you working direct as a contractor then its sole trader and your self employed
if your subbing off others its self employed
later on you can become limited, you are then employed by your company
there are a lot of rules with ltd companies and it can be expensive. the best way to decide is to work back from retirement.
do you want to work for yourself and retire , retiiring the business or do you want to build something you can sell on and that will stand alone and go on after your retirement, if you do decide the latter its best to give yourself a company name rather than trade under your own
a lot of businesses on here could be sold as going concerns, wether they are limited or not as the owners have chosen names for their businesses
if your subbing off others its self employed
later on you can become limited, you are then employed by your company
there are a lot of rules with ltd companies and it can be expensive. the best way to decide is to work back from retirement.
do you want to work for yourself and retire , retiiring the business or do you want to build something you can sell on and that will stand alone and go on after your retirement, if you do decide the latter its best to give yourself a company name rather than trade under your own
a lot of businesses on here could be sold as going concerns, wether they are limited or not as the owners have chosen names for their businesses
M
mikethetile
ive just realised the above reply doesnt really answer your question
if its just you, van, tools and marketing then its sole trader
the tax rules are a lot easier and you dont need to get audited and registered at companies house
ltd companies are more for those that have heavy borrowings for their business and being limited limits their liability, if things go belly up their business takes the hit not them personally
but think about your trading name as it makes your business more saleable if the good name and market awareness that has built up over the years can be carried on by a change of management
using your own name limits this as the buyer is only buying tools and a customer list and will then have to remarket as a new business
if its just you, van, tools and marketing then its sole trader
the tax rules are a lot easier and you dont need to get audited and registered at companies house
ltd companies are more for those that have heavy borrowings for their business and being limited limits their liability, if things go belly up their business takes the hit not them personally
but think about your trading name as it makes your business more saleable if the good name and market awareness that has built up over the years can be carried on by a change of management
using your own name limits this as the buyer is only buying tools and a customer list and will then have to remarket as a new business
A
aph257
Thanks for advise, it confirms what i thought, i needed some second opinions.
C
Colour Republic
to start off with I would suggest you go self employed it's a hell of a lot easier on the accounting
But if you wanted you can also set up a limited company (cost you about £30) and then instantly make the company dormant by not trading, meaning you don't have to submit full accounts as it's not trading but what it does do is protect the name so you can start trading under it at a later date.
But if you wanted you can also set up a limited company (cost you about £30) and then instantly make the company dormant by not trading, meaning you don't have to submit full accounts as it's not trading but what it does do is protect the name so you can start trading under it at a later date.
A
Aston
agree with colour rep.....
i set up a astontilingltd 2 years ago so that when the time is right , its ready to go..you also have to be careful not to use ltd on any of your advertising etc!!
it cost around the amount cr mentioned. its dormant but i do have to fill in a annual return and dormant accounts form. i think the return is due again in april and there was a fee of around £14....its all a bit of a faff but as cr mentioned, it protects the name and its there when you need it....
go as a sole trader for a few years and then consider the jump..
all the best
ed
i set up a astontilingltd 2 years ago so that when the time is right , its ready to go..you also have to be careful not to use ltd on any of your advertising etc!!
it cost around the amount cr mentioned. its dormant but i do have to fill in a annual return and dormant accounts form. i think the return is due again in april and there was a fee of around £14....its all a bit of a faff but as cr mentioned, it protects the name and its there when you need it....
go as a sole trader for a few years and then consider the jump..
all the best
ed
R
Richard Edwards
I would not go Sole Trader - There are still good tax advantages by being Ltd. You do not need to be audited by accountant a small company - Companies Act 2006 refers. I do not pay PAYE / NI as a director. I went Ltd in 2003 and I do all my our accounts right up and including balance sheet - literally everything in house, yes its takes time, but lets be honest we are not working every day in this business, so take those quieter days to keep up with your paperwork. That said, to do this level of accounts, you need to be fairly good with office / paperwork and figures, its not for everyone.
It a decision driven by you. Mikethetile is right, that if you want to build up your business, go for a proper Name and if you want to sell it in the future you can. The only thing to remember is that to sell a going concern, you'll need to be in a position to step back and through the Companies employees, the business must still be able to function. In other words, if your a Ltd Co , one employee ie you, then this won't sell for much, if you have 10 staff and turnover of £1m then it will.
Hope this helps and has not confused you too much.
It a decision driven by you. Mikethetile is right, that if you want to build up your business, go for a proper Name and if you want to sell it in the future you can. The only thing to remember is that to sell a going concern, you'll need to be in a position to step back and through the Companies employees, the business must still be able to function. In other words, if your a Ltd Co , one employee ie you, then this won't sell for much, if you have 10 staff and turnover of £1m then it will.
Hope this helps and has not confused you too much.
G
grumpygrouter
Just to add my bit to what has been said previously, it is probably more appropriate for you to operate as a sole trader unless you have very specific requirements for going limited. Being limited has much less protection now a days than it use to as any finance the company may require will be secured against the directors of the company... you! The accounting requirements are not really any more involved than a sole trader business except that you must file accounts annually at companies house (in accordance with the layouts detailed in the Companies Act), file a corporation tax return and also an annual return. As a director you will also need to file a Self assessment Tax Return.
As a sole trader you are required by law to keep "adequate books and records" sufficiently detailed so that HMRC can assess any tax liability reasonably accurately, so not much different to being self employed on the daily book keeping side!
As a sole trader you are required by law to keep "adequate books and records" sufficiently detailed so that HMRC can assess any tax liability reasonably accurately, so not much different to being self employed on the daily book keeping side!
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W
White Room
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A
aph257
Thanks guys:8:
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