changing from sole trader to limited
Discussion
I've recently opened a shop buisness and am currently trading as a sole trader. I went this way to get things going asap and to make it as easy as possible.
I now realise that I would much prefer to run as a limited company.
How do I go about changing over to a limited company?
We also used a credit card to buy some shop fit items. Can this balance be transfered into the company? How would we go about this? Company credit card and a balance transfer?
Also, how would I go about paying myself. I am currently the owner and only employee of the company. I take it that registering as a limited company, I would be the owner/director and would have to pay myself a wage rather than the money being my own etc. Do I need to set myself up on some kind of payroll PAYE type thing through the company or can I just withdraw my wage and put it in the books etc.
Many thanks
I now realise that I would much prefer to run as a limited company.
How do I go about changing over to a limited company?
We also used a credit card to buy some shop fit items. Can this balance be transfered into the company? How would we go about this? Company credit card and a balance transfer?
Also, how would I go about paying myself. I am currently the owner and only employee of the company. I take it that registering as a limited company, I would be the owner/director and would have to pay myself a wage rather than the money being my own etc. Do I need to set myself up on some kind of payroll PAYE type thing through the company or can I just withdraw my wage and put it in the books etc.
Many thanks
Deluded said:
I've recently opened a shop buisness and am currently trading as a sole trader. I went this way to get things going asap and to make it as easy as possible.
I now realise that I would much prefer to run as a limited company.
How do I go about changing over to a limited company?
We also used a credit card to buy some shop fit items. Can this balance be transfered into the company? How would we go about this? Company credit card and a balance transfer?
Also, how would I go about paying myself. I am currently the owner and only employee of the company. I take it that registering as a limited company, I would be the owner/director and would have to pay myself a wage rather than the money being my own etc. Do I need to set myself up on some kind of payroll PAYE type thing through the company or can I just withdraw my wage and put it in the books etc.
Many thanks
What has made you think that a limited company is a better option?I now realise that I would much prefer to run as a limited company.
How do I go about changing over to a limited company?
We also used a credit card to buy some shop fit items. Can this balance be transfered into the company? How would we go about this? Company credit card and a balance transfer?
Also, how would I go about paying myself. I am currently the owner and only employee of the company. I take it that registering as a limited company, I would be the owner/director and would have to pay myself a wage rather than the money being my own etc. Do I need to set myself up on some kind of payroll PAYE type thing through the company or can I just withdraw my wage and put it in the books etc.
Many thanks
NICE TO HAVE YOU BACK ERIC!!!!!!!!!!!!!!!!!!!!
LTD companies are a totally different ball game to sole props or partnerships. They can be tax efficient depending on your situation, and obviously if it all goes t1ts up there is no come back on you personally assuming you run the company as you should.
The main thing to consider is that the company will pay corporation tax on its profit, use to be 20% now its a bit more 21 or 22% I think.
Usually a director will pay himself a salary up to the personal allowance limit of roughly £5600 pa, then draw a dividend from the company at a much reduced tax rate or effectively free (don't forget you pay CT before any dividend)so if you own the company you will effectively be paying 20% tax. That is not strictly the case as its not you paying the tax but the company, but the way I see it if you own the company you are paying the tax.
A ltd company can be set up very easily and quickly for about £150 - £200 through company formation services like Jordans.
LTD companies are a totally different ball game to sole props or partnerships. They can be tax efficient depending on your situation, and obviously if it all goes t1ts up there is no come back on you personally assuming you run the company as you should.
The main thing to consider is that the company will pay corporation tax on its profit, use to be 20% now its a bit more 21 or 22% I think.
Usually a director will pay himself a salary up to the personal allowance limit of roughly £5600 pa, then draw a dividend from the company at a much reduced tax rate or effectively free (don't forget you pay CT before any dividend)so if you own the company you will effectively be paying 20% tax. That is not strictly the case as its not you paying the tax but the company, but the way I see it if you own the company you are paying the tax.
A ltd company can be set up very easily and quickly for about £150 - £200 through company formation services like Jordans.
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