Ltd company

[colwoodlandcare]

What are the pros and cons. At the moment my friend and I are sole traders but we work together and buy are kit together.

 

The main thing we are seeing is the joint ownership of the vechicals and the ease of payment to customers.

 

Does being a limited company make you car insurance cheaper at all?

 

Any help would be appreciated

[penfold]

at the moment you are liable for any debts the company incurrs but the meaning of being a limited is that you have a limited liability in that you are only responsible for the amount you put into the company. Or thats what i understand from my management lectures this year at uni.

[Billy68]

i would go and seek advice from your accountant as if you fall out things can get messy

[treemeup]

it'l bump your insurance!

[Peter]

Being ltd doesnt make anything cheaper.

 

Limited liability is the only real advantage, and even then if the director(s) have been negligent then they can be held personally financially liable.

 

You will struggle to get credit with a new ltd co, and will probably have to give a director's guarantee, which just formally states that the director(s) are personally liable in the event of bankrupcy.

[penfold]

thats what i was trying to say peter but couldn't quite remember which bit went where.

[Ian C]

it'l bump your insurance!

 

I went Ltd last december and none of my insurance has changed, as peter said credit can be harder but i financed a new chipper in feb with no problem.

[Al Cormack]

As a ltd company you can pay yourself a lower wage by paye and take out the rest as dividends. It is a much more tax efficient way of paying yourself, and you will save loads on tax and national insurance.

The company will have to pay corporation tax, but still cheaper than paye tax, and with a good accountant he should be able to keep the corporation tax as low as poss.

[colwoodlandcare]

I see i see, hmm, well I'm going to have a word with my accountant but by the sounds of it, it doesn't seem worth while.

Is there any way of splitting the ownership of trucks ect, as at the moment some things are in my name and some in his name.

[evergreen]

Set up a partnership in that case, your accountant will help you on that.