Hi,
i would just like some clarification of both the limited and sole trading options of membership for a business.

first off i am a start up business currently selling high-end designer clothing but eventually will be steadily expanding growth of my business to offer a wide range of products.

i know the ltd option gives you protection against someone 'stealing' your name, two seperate legal entitys, amongst other things i'd be greatful if anyone could list ALL! the advantages and disadvantages of the option.
please note i have read many articles on the HMRC and businesslink website but would like better clarification from TWF members.

as mentioned before as i am a startup, i realise you have to pay to incorporate businesses into a ltd company and have the risk of all debts run up whilst being sole trader is directly linked to you not a business name, so any debt acquired you could potentially lose your house,ect. again like the ltd business option could people offer any advice on the sole trader business registration.

Please also bear in mind my situation.

Thanks for your time
Many Regards,
Dale

http://www.companieshouse.gov.uk/

Ltd. Company is often £30 or less (PM me if you want sample association papers), only go sole trader if you can't keep financial records or cant afford the initial £30.

Risking a crappy life for a business idea is almost always a bad idea.
You will also almost certainly need the services of an accountant if you run a Ltd. Company.

Others may argue, but I would never put my life on the line for money.
PS if you are under 16, any debts may even be accountable to your parental guardians.

Originally Posted by Sphinx111

Others may argue, but I would never put my life on the line for money.
PS if you are under 16, any debts may even be accountable to your parental guardians.

If he is under 16 he cant run a ltd company anyway have to be 16 or over, but also might be worth waiting a week till the new act comes into force as its then meant to be easier to setup the company. If someone acts as a name as the director while he in effect does the directors dutes is I believe is illegal as well but suspect you would never get challanged on that.

My background is contracting and most people go down the route of ltd mainly as it is much more tax beneficial than being self employed moreso once you get into the 40% tax bracket. Accounting wise its not hard anyway I have to do a spreadsheet each month for the accountant and thats it, as long as you keep on top of it isnt too much of a chore.

Register you company name and submit a letter to company house and your local tax man to tell them that this company is dormant. This way you keep your name and be able to trade as a sole trader until the time comes you need to register as a ltd company. But if you go for this option please keep within the guildlines which are on company's house website and you need to pay them to keep your name for the following year.

The problem is you need to speak to your accountant about the true in and out of a ltd company. As a trading selling designer clothes you might find you are better of going to a ltd company right from the start because of the expected high turnover you will be achieving. I have known people who spoke to an accountant for free and got all the information they need before deciding. You just need to be bold and ask.