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lame plumber
Also, there are tax benefit of getting 'key man' insurance which can act as a kind of life insurance policy. A good IFA can guide you on that too.
can tell your background,
Discuss Registered a Ltd company for sole trader? in the Plumbing Jobs | The Job-board area at PlumbersForums.net
Also, there are tax benefit of getting 'key man' insurance which can act as a kind of life insurance policy. A good IFA can guide you on that too.
Lots of different points being mixed together here.
There are three main reasons that our customer choose to go Ltd:
- To protect their personal assets from business risks
- To minimise their tax liability
- If the business is owned by more than one person, a ltd co shareholding structure gives more flexibility
The benefits of 1) are not as clear-cut as some people think, but they are real. Many wholesalers (including us) will ask for a directors guarantee unless the ltd company has significant assets and several years trading history. The bank and other lenders are likely to take a similar line. My personal view is that the best way to protect those assets is to trade in such a way that you don't enter into commitments that you can't fulfil. I appreciate that this can be difficult when subbying on new-build for example, which is why we don't chase customers who specialise in that line of work, because they are inherently risky.
To be honest, you are unlikely to be pursued by the authorities if your Ltd company goes bust unless
a) you owe the taxman lots of money or
b) you do it over and over again
The tax liability issue depends on individual circumstances. The best advice our accountant ever gave us was "run your business to make a profit, not to avoid tax". Unless the sums are quite large, you need to be aware that you might find yourself running up accountancy bills, and using up your own time on stuff that could have been earning money.
The business of mixed ownership probably doesn't apply in this case. I tend to be wary of new starts that are run by more than one person anyway - new partnerships often dont survive the growing pains, and sleeping partners tend to wake up quickly if they dont get the return they were expecting.
Very sound advice from Ray maybe he did not spell it out but suppliers will not always allow credit accounts to small and new ltd companies cause when they go tots up ray and co cannot get the dosh back but with sole traders etc they can take your truck wife etc CHK
Its more than just that CHK, although what you say is true.
The best person to judge the level of risk in a business is the owner. If the owner is using their time and money to create a limited company to protect themselves from the risk in their own business, what message does that send to potential creditors?
Its more than just that CHK, although what you say is true.
The best person to judge the level of risk in a business is the owner. If the owner is using their time and money to create a limited company to protect themselves from the risk in their own business, what message does that send to potential creditors?
It's good business sense to protect yourself. It doesn't mean you are a conman for running an ltd (although there are far too many of them out there).
That's like saying having PL insurance means you know you're gonna screw up. That's not the case, you just value the security afforded to you by paying the premium.
fully agree.
But out of interest, as we move from sole trader to ltd do we have to notify you?
also would our credit get reduced ?
The flipside is why does a new business have to be limited when they don't have the work to threaten their personal assets?
It's good business sense to protect yourself. It doesn't mean you are a conman for running an ltd (although there are far too many of them out there).
That's like saying having PL insurance means you know you're gonna screw up. That's not the case, you just value the security afforded to you by paying the premium.
I went Ltd from day 1. Nothing to do with protecting assets, just the way I wanted to structure the company. I had (still have) a vision and strategy, and a Ltd. company fit that better than sole trader.
I've had no trouble opening trade accounts but that may be because I didn't open accounts until I'd been trading for a while, always paid my bills, and showed through my purchasing history that I have a viable business.
a long way to date as I always found the advice received from financial advisers and finance companies to be detrimental to my pocket, so I choose not to use them and prefer not to waste my earnings on PL insurance and the like.
I plan to make profit not to fend off loss
Ahhhh two schools of thought.
neather are right and neather are wrong
but rays only going to easily give credit to one of them......
, thats the reason this country is in the doldrums now, down to poor financial controls and too much risk
my mistake, was thinking pl stood for some insurance product to stop you losing income or whatever, but if your referring to public liability we seemed to have moved 15 paces left. Of course I have pl insurance as you mention but this is nothing to do with ltd companies and the earlier arguments put forward. Not sure. what line you argument is trying to achieve now
taking out public liability insurance has nothing to do with being with gsr as far as Im concerned, it is just to protect those I work for from me accidently wrecking their lives and getting some compensation. Nothing to do with ltd companies as this thread started on.
Reply to Registered a Ltd company for sole trader? in the Plumbing Jobs | The Job-board area at PlumbersForums.net
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