the transition from sole trader to LTD.

[Dilz]

I have just gone from a sole trader to LTD. My reasons were do you being able to go for better contracts as well as the hole dividend thing. I'm wondering if anyone out there who has already done this can identify any possible pit falls from converting to a LTD company from being a sole trader or ticks into getting things running smoothly. one question in particular is to do with equipment, does the company have to buy its own equipment? i.e i sell my equipment to the company or, can i just give the company my equipment as part of the initial investment? Any help would be great

[likeitorlumpit]

I have just gone from a sole trader to LTD. My reasons were do you being able to go for better contracts as well as the hole dividend thing. I'm wondering if anyone out there who has already done this can identify any possible pit falls from converting to a LTD company from being a sole trader or ticks into getting things running smoothly. one question in particular is to do with equipment, does the company have to buy its own equipment? i.e i sell my equipment to the company or, can i just give the company my equipment as part of the initial investment? Any help would be great

 

It's a nightmare- I too have just done it and it's best to ask your accountant. You will be paying him more now anyway what with audited accounts so best to keep him in the loop

You run 2 accounts for a while but the new company buys everything from the old including creditors and debtors.

I wish we had done this 12 months ago as I've just had a huge tax bill

[gensetsteve]

I run a 4.2 landcruiser and going limited would cost me a fortune. The tax breaks are not as good as they were limited but you do protect your personal wealth if things go wrong.

[Dilz]

in what way would running your land cruiser cost you a fortune? or is this because you use it more for personnel use? I got an e-mail from my accountant about buying a company vehicle today and that i was to ring him if i was going to put a vehicle into the company or make a purchase. I am now thinking it is a complete pain in the ass sorting out all this, as i told my accountant you do paper work, i do the trees and now i'm looking at more indepth book keeping, log books proper kit check records......

[Billy68]

if you have a good accountant they should hold your hand thoughout the whole process

somwhere along the line you essentially sell your equipment and good will to the new company .what part of the country are you in

[Dilz]

i trade in Sweden and the UK - work is mainly in North Lincs but i'm fortunate to be able to travel anywhere the work is (no kids and understanding (Swedish) Girlfriend). Being Limited makes things easier to continue trading in Sweden. Im sure it will all come into place but i expect this first year to be a head ache, also was told that i would be able to save several grand a year in tax with the dividends and stuff...fingers crossed.

[jltree]

you sell your equipment to the ltd side and take it back as a directors loan. Take a wage and try and kep it to 600 a month or you will pay employer NI which is 13.5%. Take a divy instead of a big wage..........

[Johny Walker]

just in the process of doing/changing to it ,already have a ltd ,putting other tree business it to it now , it does have its benifits you need to ask you acconut how to get the best out of them

[Gareth Dalzell]

I have just gone from a sole trader to LTD. My reasons were do you being able to go for better contracts as well as the hole dividend thing. I'm wondering if anyone out there who has already done this can identify any possible pit falls from converting to a LTD company from being a sole trader or ticks into getting things running smoothly. one question in particular is to do with equipment, does the company have to buy its own equipment? i.e i sell my equipment to the company or, can i just give the company my equipment as part of the initial investment? Any help would be great

 

Your accountant will advise you on the dividend thing - but remember if HMRC think you are decreasing your salary and taking more in dividends they will class this as tax evasion. They have tightened up on things like this in the last few years.

You don't automatically have to make a full audited accounts - there are lower level excemptions - we turn just under £1/2million and submit unaudited

The protection from making a mess-up are not total - in certain circumstances they can still pursue you for personal liability

You should tell your suppliers or people you have trade accounts with as if the company defaults on payments they may still take action against you personally as that's how the accounts were originally set up.

The limited company is a living and breathing entity and has its own position in law - even if you die it still exists.

We crossed to the dark side about 12 years ago and day to day it doesn't make a lot of difference - except I am now an employee and although I like to think I own the company it actually owns me:biggrin:

[Dilz]

the other anoying thing is i have to re do all my invoice and quote sheets