Ltd. Company

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Ed209
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Ltd. Company

Post by Ed209 » Tue 04 Dec, 2018 9:25 am

Just wondering the advantages/ disadvantages of becoming a ltd. Co.
We are considering taking on new premises that will be double our current rent and mean committing to a lease as opposed to our simple no commitment rental shop.
I suppose my biggest worry is if something happened to me and I was tied in and committed to paying out on the lease rental
and having our house liable if we got in to financial difficulties.


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Tom Chambers
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Re: Ltd. Company

Post by Tom Chambers » Tue 04 Dec, 2018 10:25 am

I recently started a new framing business and went Limited for several reasons, firstly it protects you financially should business struggle, secondly it was so easy to set up and very little cost. Having been a sole trader and Ltd over the years I say both do not take any more work (as I believe you should have proper financial controls in place no matter). The other aspect mentioned to me is that suppliers, customer etc. can feel that dealing with a Ltd company is safer option. Best to speak with accountant to make sure which is best for you, I was lucky that one of my neighbours is an accountant and he was the one who explained how easy a Ltd company was to set up and the better protection it gives, especially if renting premises etc.

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Tom

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Rainbow
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Re: Ltd. Company

Post by Rainbow » Tue 04 Dec, 2018 11:43 am

Ed209 wrote:I suppose my biggest worry is if something happened to me and I was tied in and committed to paying out on the lease rental
and having our house liable if we got in to financial difficulties.
I would suggest looking into critical illness insurance in case you become too ill to work, and life insurance in case you die during the lifetime of the lease. Such policies should cover the lease costs (at least) and give you & your family peace of mind.

Bonne santé in the meantime!

poliopete
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Re: Ltd. Company

Post by poliopete » Tue 04 Dec, 2018 10:06 pm

Hi Paul :D

I don't pretend to know anything about being a Ltd Company but I would certainly look into it. I understand your concern regarding your home.

I'm surprised no one has come along as yet who is registered as an Ltd. Company :o

As Tom said, have a chat with your accountant or bank manager and perhaps get a free half hour with a solicitor for his/her view.

As an aside, a close family member died a few years ago heavily in debt to one of the big four banks. After he passed away the debt was written off and his close relations were not in the least liable.

Looking at your website and seeing the very high standard of your work and knowing how hard you work, I am confident you will make a success of your new enterprise.

Very best of luck whatever you decide.

As Del Boy would say "he who dares wins" :giggle:

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David
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Re: Ltd. Company

Post by David » Thu 06 Dec, 2018 12:24 pm

I converted my business to a Limited Company, on advice from my accountant, it was a combination of tax situation which was better than being self employed and we had two businesses on two sites and it clearly seperated the businesses so if anything happened to one the other should be 'safe'. The issue with signing a lease as a Limited Company is the first thing they ask for is a personal guarantee so a Ltd Co is no protection. There is more paperwork and regulation, not much but you need an accountant to take care of it.

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Framerpicture
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Re: Ltd. Company

Post by Framerpicture » Thu 06 Dec, 2018 3:49 pm

Most of the tax advantages of being a Limited Company have disappeared since the introduction of the dividend tax. It does offer some protection, but personal guarantee's will still be required for leases's, loans and probably overdrafts

A possible advantage going forwards, is that if we hard Brexit, which is looking increasingly likely, I think reducing corporation tax will be one of the tools used to retain business in the UK . Maybe not a reason to rush to form a company though.

My instinct tells me to batten down the hatches and prepare for a complete lack of customer confidence, at least in the short term.

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Re: Ltd. Company

Post by Not your average framer » Wed 09 Jan, 2019 10:30 pm

The govenment's next financial budget is not that far ahead at the moment and it may give you some helpful information to consider while making your decision. Maybe there might be some clues about what to expect for the next years finances.
Mark Lacey

“Life is short. Art long. Opportunity is fleeting. Experience treacherous. Judgement difficult.”
― Geoffrey Chaucer

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