ltd co newbie advice

[hairyben]

What do I need to do?

As a sole trader sparky and a home owner I'm aware, in todays litigious climate, that limiting myself is advisable, but how exactly do you go about doing this?

[Super Slo Mo]

Speak to an accountant first, but it's really easy and cheap to do it through companies house.

[hairyben]

Super Slo Mo said:

Speak to an accountant first, but it's really easy and cheap to do it through companies house.

Is that absolutely necessary? Sacked my accountant off after he told me not to worry about exceeding the VAT threshold - guess how that ended - and do it all myself now

[Eric Mc]

I hope you are up to speed on FRS102 and FRS105.

If not, you had better find out what's happening.

[Super Slo Mo]

hairyben said:

Super Slo Mo said:

Speak to an accountant first, but it's really easy and cheap to do it through companies house.

Is that absolutely necessary? Sacked my accountant off after he told me not to worry about exceeding the VAT threshold - guess how that ended - and do it all myself now

Limited company accounts need to be prepared to a specific standard. If accounting is not your day job you're probably not going to be able to do this adequately. Virtually all smaller limited companies use an accountant for this reason.

[Eric Mc]

And that "standard" is -

FRS102


or

FRS102 1a

or

FRS105

Depending on certain factors.

Also, small companies for year ends up to 31 December 2016 can still use FRSSE

The accounts will also have to comply with the requirements of the Companies Act 2006 as they apply to small companies.

And finally, they must also be compliant with the Corporation Tax regulations which covers, of course, the attached Corporation Tax computations.

[Simpo Two]

How about professional indemnity insurance instead?

[Jockman]

Limited liability protection is not always sufficient. You may wish to consider D&O liability too.

[Eric Mc]

And the limited liability associated with running a business through a company may not be as limited as you might think.

[hairyben]

Simpo Two said:

How about professional indemnity insurance instead?

I have indemnity and liability and I'd hope they're good policies as they're through the NIC-EIC rather than the cheapest out there (I've heard of blokes left unable to work or ever own anything nice after liability using a get out clause), are these enough to fully protect me?

[insurance_jon]

one thing to bear in mind (and I'm saying this after going ltd recently)is that its a shock to the system having to pay my own car finance and petrol and insurance now;)

[TwistingMyMelon]

Find a decent accountant if you are in it for long run, ask around see who is recommended (a few even post on here!)

A decent accountant will be able to advise what setup is best for you and then let you make the decision , they can think ahead and whilst options might not be good now, they might be relevant in the future.

[Muncher]

Eric Mc said:

And the limited liability associated with running a business through a company may not be as limited as you might think.

In what way Eric?

[Eric Mc]

Various laws have been passed over the years which, in theory, make directors personally liable for certain things when they go wrong (Corporate Manslaughter, for instance).

Directors could always be held responsible for things going bad if it was decided that they had acted "ultra vires" i.e. beyond their authority, in some aspect of running the company.

And directors themselves erode their own protection by using personal assets (often their home) as collateral for company borrowing - or sign personal guarantees for company borrowing.

[s2kjock]

Eric Mc said:

Also, small companies for year ends up to 31 December 2016 can still use FRSSE

[Eric Mc]

s2kjock said:

Eric Mc said:

Also, small companies for year ends up to 31 December 2016 can still use FRSSE

Oops - should have said, all sets of accounts for periods commencing 1 January 2016 on CANNOT use FRSSE and have to use FRS102, 102 1A or 105.

Bloody confusing, isn't it.

[Jockman]

Muncher said:

Eric Mc said:

And the limited liability associated with running a business through a company may not be as limited as you might think.

In what way Eric?

Hence the advice to take out Directors and Officers Liability Insurance.

[GetCarter]

Maybe O/T

But, not always the best way to go. I was a ltd co for a few years but worked out cheaper as a sole trader.