Why do people register as businesses?
Discussion
Dr Jekyll said:
m3jappa said:
What about the people who have a visibly successful business......
But
The limited company accounts for those companies show zero, nothing at all, dormant accounts and basically look like they aren't trading. other directors info also shows the same. All directorships they hold show the same- f
k all!
I have come across this a few times when seeing someone successful and feeling a bit nosey wondering just how well they are doing. Unless they are also trading as a sole trader but then why the limited company in the name the business appears to be trading in?
Must be dodgy as fk surely!
Some people set up a LTD company for particular contracts then stop using it. It doesn't cost much to leave it dormant in case they want to use it again. I know people working as conventional PAYE employees who still maintain companies from their contracting days.But
The limited company accounts for those companies show zero, nothing at all, dormant accounts and basically look like they aren't trading. other directors info also shows the same. All directorships they hold show the same- f
k all! I have come across this a few times when seeing someone successful and feeling a bit nosey wondering just how well they are doing. Unless they are also trading as a sole trader but then why the limited company in the name the business appears to be trading in?
Must be dodgy as f
k surely! Another reason is clients - or rather 'sectors'.
Some, the public sector for example, will only do business with Ltd companies although some may appoint a sole trader for smaller jobs at less than a £1k in value.
You can become a very sizeable business as a sole trader. IIRC, the shoe retailer Kurt Gieger operates as a sole trader....which is rather apt!
Some, the public sector for example, will only do business with Ltd companies although some may appoint a sole trader for smaller jobs at less than a £1k in value.
You can become a very sizeable business as a sole trader. IIRC, the shoe retailer Kurt Gieger operates as a sole trader....which is rather apt!
Sheepshanks said:
If they have a decent go at it, it's good exerience for them and should make them useful employees if they're recruited into a PAYE job. Better than kids just doing bar work etc.
I think the 'decent go at it' is key there. I'm not sure banging a few mediocre photos that look like they've been taken with a phone on to a web site full of hyperbole about changing the photographic industry landscape and strutting about calling yourself a 'company director' on Facebook really qualifies! 
The good thing about being a sole trader is
A sole trader can withdraw cash from the business without tax effect.
But it always seems to hurt when there is class 2 and 4 National insurance payments to be made as well as income tax
In a limited company you are an employee and National Insurance payments are taken at source you then have corporation tax to pay think it is 19% at the moment.
Taking money out of Ltd company isnt as easy as it is when you are sole trader
A sole trader can withdraw cash from the business without tax effect.
But it always seems to hurt when there is class 2 and 4 National insurance payments to be made as well as income tax
In a limited company you are an employee and National Insurance payments are taken at source you then have corporation tax to pay think it is 19% at the moment.
Taking money out of Ltd company isnt as easy as it is when you are sole trader
Mr Pointy said:
Simpo Two said:
It's clearer if you call it 'incorporating' (which makes a limited company). 'Registering a business' is just telling HMRC that you're making some money doing something.
Two reasons for incorporating. (1) possible beneficial taxation depending on how much you think you might earn (2) ego. Oh and (3) if you're dodgy and plan to go bankrupt.
4) Limited Liability. If you're a Sole Trader not a Limted Company everything you own is on the line.Two reasons for incorporating. (1) possible beneficial taxation depending on how much you think you might earn (2) ego. Oh and (3) if you're dodgy and plan to go bankrupt.
Eric Mc said:
With a sole trader you are taxed on the business profit no matter how much money you withdraw.
Yes you are but your free to draw as much or little as you want as it belongs to you not the Ltd company, it can make things easier when you relise you just put that brand new 75 inch tv on the business card.Hard to explain away as business expense for the ltd company but no worries if your a sole trader, as the funds are yours
As long as you dont try and claim it that is
nickv said:
Yes you are but your free to draw as much or little as you want as it belongs to you not the Ltd company, it can make things easier when you relise you just put that brand new 75 inch tv on the business card.
Hard to explain away as business expense for the ltd company but no worries if your a sole trader, as the funds are yours
As long as you dont try and claim it that is
Pffft everybody needs a 75” monitor for viewing emails!Hard to explain away as business expense for the ltd company but no worries if your a sole trader, as the funds are yours
As long as you dont try and claim it that is
Might have been said before, but a limited company is a separate entity;
as a director, your liabilities are limited to what you put into the business,
Your other assets are ring-fenced, unless they are used as collateral or involved in the business,
That's why you go limited, to protect your assets
As for unnecessary titles,
It's just bigging themselves up, they probably also refer to themselves as Mr Managing Director with letters after their name referring to successfully completed day courses
as a director, your liabilities are limited to what you put into the business,
Your other assets are ring-fenced, unless they are used as collateral or involved in the business,
That's why you go limited, to protect your assets
As for unnecessary titles,
It's just bigging themselves up, they probably also refer to themselves as Mr Managing Director with letters after their name referring to successfully completed day courses
Ziplobb said:
Some blokes get a hard on out of calling themselves company directors. The reality is they could not direct themselves out of a paperbag.
Some women get wet on calling themselves company directors. The reality is they could not direct themselves out of a paperbag.
I used to have to sit in front of them when I was opening business bank account for a high street outift. I can spot them a mile off - its my sixth sense.
They might have paid enough attention at school to know that paper bag is a two word term, though.Some women get wet on calling themselves company directors. The reality is they could not direct themselves out of a paperbag.
I used to have to sit in front of them when I was opening business bank account for a high street outift. I can spot them a mile off - its my sixth sense.
Edited by Pothole on Friday 13th December 12:16
Sambucket said:
If you are B2B lots of industries won't deal with non ltd companies.
That's because they don't want to be liable for a ST's unpaid tax & NI.Sambucket said:
Hard to sell a business that doesn't have accountancy/governance history.
It's virtually impossible to sell a PSC where the only assets are the skills & knowledge of one person.
Sambucket said:
You can reinvest all your profits and not pay any corp tax.
Hard to sell a business that doesn't have accountancy/governance history.
Regarding investing your profits and getting tax relief - the same rules apply to non limited company businesses. And tax relief depends on how you re-invest your profits.Hard to sell a business that doesn't have accountancy/governance history.
Small, owner managed limited companies do not require any more governance than a sole trader does.
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