When exactly are you operating as a Limited Company?

[Arif110]

Difficult to phrase with the character-limit!

Example : You have a website from which you sell (casually/as a sole trader) art and craft things you make.

Let's say you happen to have a limited company registered and incorporated.

Now what exact action will mean that your web business goes from operating as Joe bloggs, to operating as Joe Bloggs Limited?

1) Just sticking the Limited entity name on the website so that people will have to infer that they are dealing with a limited company?

2) Is there not more to it than that? I mean - don't you have to register the usage of a company for a specific business application? Cos as it is - it seems as though one can just bung the company name on and bandy it about at will - and take it off again.

3) Does that not then mean that you can simply dart and flit happily between operating as a limited company or not, as far as the customers' points of views are concerned? e.g. just taking the 'Limited' bit off the website at will?

I hope I've conveyed what I'm after - what 'means' that one is now operating (& a customer is dealing with) a limited company?

Thanks in advance for your replies, as ever.


Arif

[Eric Mc]

Your basic question is - when is a limited company deemed to have commenced trading?

The answer is, whenever it starts passing trading transactions through its accounts. This can be signalled by -

opening a limited company bank account
creating sales invoices in the name of the limited company
instructing suppliers to address and send invoices to the limited company

Basically - the company starts trading when you indicate to the outside world that you have started trading.

Once it has commenced, it is best practice to cease the old sole trader activity as it will only cause confusion - both to yourself and your customers and suppliers.

I have to say, why did you decide yto operate as a limited company?

[Arif110]

Hi Eric!

Thanks for your characteristically-erudite and thorough reply.

I haven't as yet 'done' anything with the Limited entity - having incorporated it more to grab and keep the name, lest it got taken in the interim.

I'm operating a photo gallery selling canvas prints. The only reason I'm minded to operate as a limited company is I don't want my personal possessions and house and everything to be at risk if 'something happens'.

Saying that - what could possibly go wrong selling canvas prints? They're very rugged dye-sub prints - and so I guess there's no real scope for the sort of law suit that could put my home at risk?

I may end up selling en-masse to corporate customers - maybe here there is scope for the risks I fear?

I'd love just to remain a sole trader - but am not willing to risk my home over it.

Any thoughts - apart from obvious ones about insurance?