Converting Sole Trader business to Limited Company

Discussion in 'UK Accountancy' started by Charlie Brooker, Oct 28, 2007.

  1. Hi,

    I've been trading for the last 2 years as a sole trader, now I'm about
    to setup a limited company specialising in exactly the same areas of
    business activity. Is it possible to convert my existing business bank
    account at HSBC from sole trader account to the limited company
    account using the same account number and sorting code? Will they
    honour my credit history?

    Is it possible for limited companies not to register for VAT?

    If I employ myself as the sole director at the limited company earning
    around 1000pm gross, how much less will I get compared to the existing
    sole trader business? How being employed at a limited company is
    better than being a sole trader in terms of national insurance,
    benefits and future pension? I'm 27 years old now.

    Can you state any cons and pros for winding up the sole trader and
    acting as a limited company?

    Thanks for any hints,
    chrl
     
    Charlie Brooker, Oct 28, 2007
    #1
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  2. On 28 Oct, 11:30, Charlie Brooker <> wrote:
    > Hi,
    >
    > I've been trading for the last 2 years as a sole trader, now I'm about
    > to setup a limited company specialising in exactly the same areas of
    > business activity. Is it possible to convert my existing business bank
    > account at HSBC from sole trader account to the limited company
    > account using the same account number and sorting code?


    No, the whole point is that a Ltd Company is an individual in its own
    right.

    > Will they
    > honour my credit history?


    Yes.

    > Is it possible for limited companies not to register for VAT?


    You need to eplain what business you are in and what sort of turnover
    you have. Generally the thresholds for Ltd and ST work out the same.

    > If I employ myself as the sole director at the limited company earning
    > around 1000pm gross, how much less will I get compared to the existing
    > sole trader business? How being employed at a limited company is
    > better than being a sole trader in terms of national insurance,
    > benefits and future pension? I'm 27 years old now.
    >
    > Can you state any cons and pros for winding up the sole trader and
    > acting as a limited company?


    If somebody sues the company you get to keep your house, is the most
    obvious "pro".

    > Thanks for any hints,
    > chrl


    If you were to say what trade you were in it would sa
     
    Troy Steadman, Oct 28, 2007
    #2
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  3. On Oct 28, 1:09 pm, Troy Steadman <> wrote:
    > If you were to say what trade you were in it would sa


    Troy, much appreciation for this post.

    With regards to the nature of my business - I am a retailer in the
    software/computing industry.
     
    Charlie Brooker, Oct 28, 2007
    #3
  4. On 28 Oct, 14:46, Charlie Brooker <> wrote:
    > On Oct 28, 1:09 pm, Troy Steadman <> wrote:
    >
    > > If you were to say what trade you were in it would sa

    >
    > Troy, much appreciation for this post.
    >
    > With regards to the nature of my business - I am a retailer in the
    > software/computing industry.


    1) If you are selling to businesses you want to be registered for VAT.
    2) If you are selling to the public you *don't* want to be registered
    for VAT.

    Maybe you do a mix in which case it would be handy for there to be two
    businesses. One might be (say) a Ltd Co, serious enough to deal with
    corporate clients, which of course you would register for VAT from the
    outset.

    The other completely separate buisiness you might operate as a Sole
    Trader and not register it for VAT unless you have to.

    These things are best planned in advance and can be difficult to
    organise retrospectively.
     
    Troy Steadman, Oct 28, 2007
    #4
  5. On Oct 28, 4:18 pm, Troy Steadman <> wrote:
    > 1) If you are selling to businesses you want to be registered for VAT.
    > 2) If you are selling to the public you *don't* want to be registered
    > for VAT.


    Thanks for your reply. I mainly sell to the public, so that I think I
    will not register for VAT until I reach the threshold.
     
    Charlie Brooker, Oct 28, 2007
    #5
  6. Charlie Brooker

    PeterSaxton Guest

    On 28 Oct, 12:09, Troy Steadman <> wrote:
    > On 28 Oct, 11:30, Charlie Brooker <> wrote:
    >
    > > Hi,

    >
    > > I've been trading for the last 2 years as a sole trader, now I'm about
    > > to setup a limited company specialising in exactly the same areas of
    > > business activity. Is it possible to convert my existing business bank
    > > account at HSBC from sole trader account to the limited company
    > > account using the same account number and sorting code?

    >
    > No, the whole point is that a Ltd Company is an individual in its own
    > right.
    >

    Banks will change the name on an account and retain the sort code and
    account number.

    Peter
     
    PeterSaxton, Oct 28, 2007
    #6
  7. Charlie Brooker

    DoobieDoo Guest

    "Charlie Brooker" <> wrote in message
    news:...
    > Hi,
    >
    > I've been trading for the last 2 years as a sole trader, now I'm about
    > to setup a limited company specialising in exactly the same areas of
    > business activity. Is it possible to convert my existing business bank
    > account at HSBC from sole trader account to the limited company
    > account using the same account number and sorting code? Will they
    > honour my credit history?
    >


    Ask your bank. They know more about you than any of the so-called experts(1)
    on here.
    Why haven't you asked them already? What are you afraid of hearing?

    (1) Definition of expert: Ex = something that has been : spirt = a drip
    under pressure
     
    DoobieDoo, Oct 29, 2007
    #7
  8. Charlie Brooker

    Guest

    On Oct 28, 12:30 pm, Charlie Brooker <> wrote:
    > Hi,
    >
    > I've been trading for the last 2 years as a sole trader, now I'm about
    > to setup a limited company specialising in exactly the same areas of
    > business activity. Is it possible to convert my existing business bank
    > account at HSBC from sole trader account to the limited company
    > account using the same account number and sorting code? Will they
    > honour my credit history?
    >
    > Is it possible for limited companies not to register for VAT?
    >
    > If I employ myself as the sole director at the limited company earning
    > around 1000pm gross, how much less will I get compared to the existing
    > sole trader business? How being employed at a limited company is
    > better than being a sole trader in terms of national insurance,
    > benefits and future pension? I'm 27 years old now.
    >
    > Can you state any cons and pros for winding up the sole trader and
    > acting as a limited company?
    >
    > Thanks for any hints,
    > chrl


    Hi Charlie,

    I did the exact same thing this year with HSBC. You will not be able
    to keep the same account for the LTD company. Reasons to change are
    related to tax and liability.

    Steve.
     
    , Oct 30, 2007
    #8
  9. > Ask your bank. They know more about you than any of the so-called experts(1)
    > on here.
    > Why haven't you asked them already? What are you afraid of hearing?


    Thanks for your reply. I always tend to ask people around about their
    experiences before I forward an official application to the bank. I
    don't trust those consultants ant the phone, you simply cannot rely on
    what they say. I hope you agree.
     
    Charlie Brooker, Oct 31, 2007
    #9
  10. Thank you Steve, this was helpful!

    > I did the exact same thing this year with HSBC. You will not be able
    > to keep the same account for the LTD company. Reasons to change are
    > related to tax and liability.
    >
    > Steve.
     
    Charlie Brooker, Oct 31, 2007
    #10
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