ltd company question

[tilley441]

If i was to register a ltd co with companies house etc and then decide that I wasn't going to use it what impact would that have on me? I'm employed paye and think I might have found an option to start a side business only thing is to have full access to the the supplier I need to prove I am a registered ltd co.

[Eric Mc]

What is your question?

Are you going to use a company or you are not. Which is it?

[tilley441]

basically if the supplier turns out to be crap i will be left with a ltd co that i have no use for, obviously if it turns out that the supplier can offer what i want then i will use it.

what i want to know is what the implications of registering a ltd co are when there is a possibility it will never be used (worst case) also how easy is it to shut down etc

[LDN]

Don't worry; you can just tell Companies House its finished with.. or keep it registered as 'dormant' - so that you have the name to spark things up again in future, using the same ltd co.

The only thing is a small amount of admin in each case... no other implications. Thousands of people register a company and never get around to using it...

[tilley441]

LDN said:

Don't worry; you can just tell Companies House its finished with.. or keep it registered as 'dormant' - so that you have the name to spark things up again in future, using the same ltd co.

The only thing is a small amount of admin in each case... no other implications. Thousands of people register a company and never get around to using it...

thanks for the help! i thought it wouldn't be a problem but thought i would ask anyway.

[Ean218]

You will never be a registered limited company, it would be an entirely different legal entity.

[trickywoo]

Ean218 said:

You will never be a registered limited company, it would be an entirely different legal entity.

Correct. He will however, be responsible for it.

More or less the first item of post you will receive will be from HMRC metaphorically rubbing their hands over the fact you'll need to file a tax return and hopefully pay them some money in the future.

It'll just be a question of admin. If it never trades it won't be too much trouble to stay compliant with minimal outlay.

[Eric Mc]

If you are only intending to use the limited company to handle a single engagement with a single customer, then you could very well have IR35 issues.

[tilley441]

Eric Mc said:

If you are only intending to use the limited company to handle a single engagement with a single customer, then you could very well have IR35 issues.

Isn't that where you work for a company under the cover of a ltd co?

[Eric Mc]

tilley441 said:

Isn't that where you work for a company under the cover of a ltd co?

It's where you work for ANY employer (another limited company, a partnership, an LLP, a sole trader, a charity, a government body, a local council etc etc) using a personal limited company as an "intermediary".

[tilley441]

That's what I thought, it's not that so should be ok

[Eric Mc]

How many customers would your company have?

Who determines the hours you work?

Who directs and controls the work?

Will your company be responsible for the work it does and bear the cost of any corrections required?

Will it carry its own insurance?

Can your company employ others or can you substitute another person for yourself without prior agreement with your customer(s)

Does your company intend to use its own tools and equipment?

Does your company have its own business premises?

Does your company advertise for business?

Does your company find work through an agency?

If it does, is the agency agreement correct for a business to business arrangement rather than an employer/employee arrangement?

Will your company buy its own materials or does it charge labour only?

[sideways sid]

Eric, your advice on here is almost always valuable, but I think you may have missed the first line of the OP, where he says he is employed under PAYE already and is looking to register a separate business to do extra work for a different supplier.

Highly unlikely to be caught under IR35 if he already has an existing contract of employment with his employer?

[Eric Mc]

sideways sid said:

Eric, your advice on here is almost always valuable, but I think you may have missed the first line of the OP, where he says he is employed under PAYE already and is looking to register a separate business to do extra work for a different supplier.

Highly unlikely to be caught under IR35 if he already has an existing contract of employment with his employer?

I got the impression that he had an offer for other work from a single additional "customer" with whom he wanted to engage with through a new limited company he wanted to set up.
Even if he retains a normal employment elsewhere, the activity of his li9mited company could still fall foul of IR35.

People always need to consider IR35 factors when establishing "one man band" limited companies.

[hyphen]

I read the OP's use of the word supplier as someone who is going to supply him with a product to sell.

You would not normally call someone you worked for a supplier? it would be client or customer.

Edited by hyphen on Thursday 1st June 16:39

[Eric Mc]

If somebody supplies you with a product to sell, then they must be a supplier. Normally, of course, the supplier will expect you to pay them for the goods and materials they supply to your business. You then sell the product or goods on to your customers.