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Resident Antagonist
Going Limited
At what point did you decide (if you have done, of course) to go from a Sole Trader to a Limited Company? What factors did you consider that made you decided that being an Ltd was more beneficial to you?
I'm thinking of taking the plunge, but want to make sure that it's the best decision for me.
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Cant see the benifits unless your gonna act as agency and employ others
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I'm with Creature on this one, unless you are thinking of taking on a considerable amount of liabilities, ie taking on employees, renting or leasing business premises, issuing and obtaining credit, increasing turnover and registering for VAT etc. etc. I can see no advantage in transferring your business into a limited company, unless of course you wish to build your own entertainment empire, which would involve taking on these liabilities. Working behind the protection of a limited company does give you protection from personal bankruptcy, but only if you have run the company in a fit and proper manner, if you have been reckless the courts can lift the veil of limitation and pursue you personally for any company debt, and/or disqualify you from holding directorships. Obviously taking professional advice is essential, but be aware your accountant would likely be in line for extra work/billing, so they might not be as impartial as you may think. I'm a firm believer in the old adage. 'turnover is vanity, profits are sanity' it has served me well.
Inside every old person, is a young person wondering 'What The Hell Happened'. Tempus Fugit
Disco 4 Hire
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As with what everyone else has said...you need to take independent financial advice on this one.
There's pro's and con's to being a limited company, and to be honest unless you're borrowing an awful lot or turning over a lot of money, there's not a lot of point.
There's more paperwork (you have to file audited accounts every year with Companies House), and corporation tax at 20% to start with.
Yes, working for a limited company can deliver benefits, for example if you pay a dividend to yourself as director, as that's normally free of NI. The company's assets are also completely separate from your own (as a sole trader, you and your business are one and the same thing in the eyes of HMRC). There's also the opportunity for the company to pay you a pension. Plus, there's the obvious benefit as already mentioned about liabilities being limited, which if you're running as a sole trader properly shouldn't be an issue anyway.
I looked at it, and to be honest decided it wasn't for me. Too much hassle for very little return.
Disclaimer.....I'm not qualified to give any sort of financial advice. This is just information I've learned from looking into it myself and from talking to my accountant. As I said at the top of the post - get independent advice on whether being a Limited company would be beneficial to you over and above being a sole trader.
What are your reasons for wanting to become a limited company by the way?
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Resident Antagonist
Originally Posted by
Imagine
What are your reasons for wanting to become a limited company by the way?
I'm hoping that becoming Ltd will actually reduce my tax. I know that if I had a Limited Company (i.e. B.S Entertainments Ltd), then I (Benny Smyth) can still be a sole trader and can take a salary out of BSE Ltd of up to £10,000 a year tax free (as that is the tax threshold), and then top it off with shareholders dividends.
There is also the limited liability (not that I'm anticipating anything bad to happen...touch wood!) that I find appealing.
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I went ltd in 2010. To be honest now I would of stayed as a sole trader if I knew what I know now.
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Originally Posted by
Fullforceeventsltd
I went ltd in 2010. To be honest now I would of stayed as a sole trader if I knew what I know now.
What do you know now that you didn't know then, which has made you wished you had stayed as a sole trader?
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Originally Posted by
Shaun
What do you know now that you didn't know then, which has made you wished you had stayed as a sole trader?
Extra administration and paperwork as a legal requirement??
Dazzy D
Lightning Disco & Entertainment
Born to make you party!
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