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Author Business day
Sam
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Registered: 24th Dec 99
Location: West Midlands
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14th Oct 10 at 15:22   View User's Profile U2U Member Reply With Quote
I am starting a new (second) business, which I anticipate will make shitloads more money than web design (well I've proven this to myself anyway from various contracts I've had recently).

What I want to know is, is it best to start up as a sole trader then incorporate, or should I incorporate now?

I had a meeting with the bank today to sort my new account out and they reckon I should speak to an accountant about this considering Business Link etc. are next to useless.

I keep hearing conflicting information off different people and it's doing my head in

[Edited on 14-10-2010 by Sam]
Gary
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Registered: 22nd Nov 06
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14th Oct 10 at 15:25   View Garage View User's Profile U2U Member Reply With Quote
LTD all the way.

A LTD co is treated as its own entity so its easier to bin off if shit goes pear shaped etc.

Plus in my opinion your taken more seriously being LTD
Ste
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Registered: 5th Mar 03
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14th Oct 10 at 15:25   View Garage View User's Profile U2U Member Reply With Quote
Keep it off the books and away from the tax mans eyes tbh

I would rather lose by a mile because i built my own car, than win by an inch because someone else built it for me.
Gary
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14th Oct 10 at 15:27   View Garage View User's Profile U2U Member Reply With Quote
Plus you can pay Dividens from a LTD and claim back directors loans etc
Gary
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14th Oct 10 at 15:28   View Garage View User's Profile U2U Member Reply With Quote
What is said business if you dont mind my asking
Whittie
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Registered: 11th Aug 06
Location: North Wales Drives: BMW, Corsa & Fiat
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14th Oct 10 at 15:28   View User's Profile U2U Member Reply With Quote
Stay sole trader untill you think it'll take off imo.

Will take a 5 minute meeting in the bank to change it to LTD etc.

I'm sole trader in 1 business and ltd 2.

[Edited on 14-10-2010 by Whittie]
Sam
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14th Oct 10 at 15:30   View User's Profile U2U Member Reply With Quote
IT maintenance (used to do it years back as full time jobs, and have done it part time alongside my existing web design business).

I assume if say for example I wanted to get a mortgage (for a house) I could say I am an employee of <whatever> Ltd and that I'd be looked upon better than as a sole trader?
Gary
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14th Oct 10 at 15:32   View Garage View User's Profile U2U Member Reply With Quote
quote:
Originally posted by Sam
IT maintenance (used to do it years back as full time jobs, and have done it part time alongside my existing web design business).

I assume if say for example I wanted to get a mortgage (for a house) I could say I am an employee of <whatever> Ltd and that I'd be looked upon better than as a sole trader?


Exactly.

Sole traders are frowned upon financially (getting credit, even insurance etc)

If you go for a personal loan you dont need to mention you own shares in the company. And technicall as a LTD co is its own thing you are an employee only. You just happen to own 100% shares
Sam
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14th Oct 10 at 15:34   View User's Profile U2U Member Reply With Quote
I need to open up trade accounts with IT suppliers (not bothered about it being cash or 30 day) but all of them have said to me they aren't interested unless I'm a Ltd company.
Hammer
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14th Oct 10 at 15:34   View User's Profile U2U Member Reply With Quote
From an accounting perspective sole trader until such times as you're making decent money.
Whittie
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Location: North Wales Drives: BMW, Corsa & Fiat
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14th Oct 10 at 15:35   View User's Profile U2U Member Reply With Quote
quote:
Originally posted by Hammer
From an accounting perspective sole trader until such times as you're making decent money.


Sam
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14th Oct 10 at 15:47   View User's Profile U2U Member Reply With Quote
I think for the reasons of opening accounts with companies and my own personal financial standing I might be forced to open a Ltd company. Hmmm...
jrsteeve
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14th Oct 10 at 16:09   View User's Profile U2U Member Reply With Quote
Depends on the expected turnover and possible risk. Either can be made to suit but sole trader costs less initially, but if you fuck up you'll be sued rather than the company.
M2RTY
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14th Oct 10 at 16:17   View User's Profile U2U Member Reply With Quote
IT contractors who work for me are LTD
Gary
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Registered: 22nd Nov 06
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14th Oct 10 at 16:47   View Garage View User's Profile U2U Member Reply With Quote
Also if your credit is shite you'll have sod all chance of a loan. With LTD it dnt matter as much
Whittie
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Location: North Wales Drives: BMW, Corsa & Fiat
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14th Oct 10 at 16:51   View User's Profile U2U Member Reply With Quote
quote:
Originally posted by glb
Also if your credit is shite you'll have sod all chance of a loan. With LTD it dnt matter as much


If your credit history is shite. Then you stand absolutely no different to getting a loand, ltd or ST.
Gary
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14th Oct 10 at 17:24   View Garage View User's Profile U2U Member Reply With Quote
Personally obv. But business wise it makes a difference.
Dan
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14th Oct 10 at 17:37   View Garage View User's Profile U2U Member Reply With Quote
I'd go sole trader till it takes off.

Have a look on uk business forum. There's a sticky thread about a million pages long about this

Adult GiftsClick here to vist us
VrsTurbo
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Registered: 8th Jun 10
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15th Oct 10 at 21:00   View Garage View User's Profile U2U Member Reply With Quote
quote:
Originally posted by Hammer
From an accounting perspective sole trader until such times as you're making decent money.


What would you say is decent money? I have a contract coming up next year for around the 25k mark should i go LTD or soletrader?

 
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