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Setting up and operating a limited company
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Rob B
Posted: 15 December 2024 16:30:57(UTC)
#1

Joined: 07/10/2018(UTC)
Posts: 1,704
I’m keen to hear from forum members who have successfully operated their own limited company. As I’ve mentioned on a few occasions, I've got to the point where working for ‘The Man’ is becoming increasingly intolerable. So the Xmas break seems like a good opportunity to plan out 'what next'.

Finances wise my mortgage will be gone by the end of 2025. A couple of mini purchases will remain on 0% finance deals (<£1,500). Other than that, I will be debt free. Being debt free isn't a precursor, it's just a big personal preference and it will give me sufficient time to learn all I need to know.

Some initial questions:

If you moved from PAYE to Ltd what lessons learned can you share?
How much ‘cash injection’ was necessary?
Guidance on specific insurances such as PI or maybe non-payment protection?
Any guidance on invoice payment terms? Is 28 days unrealistic?
Did you seek any specialist advice other than an accountant?
Any good websites or books you would recommend? Heelan Associates seems really informative.

I'm considering using a 1st Formations package (Reserve a Company Name), which would set it to a dormancy status in preparation for a transition from PAYE to LTD in April 2026. Got a name I like and would be good to reserve this.

Any guidance greatly appreciated.
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Hilda Ogden
Posted: 15 December 2024 16:35:37(UTC)
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Joined: 31/07/2023(UTC)
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Cut out the middleman and set the company up yourself. Takes just a few minutes at companies house. Download typical articles of association and the certificate of incorporation and you are in business. Takes a few minutes and costs very little.
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4 users thanked Hilda Ogden for this post.
Rob B on 15/12/2024(UTC), Jay P on 15/12/2024(UTC), Dentmaster on 15/12/2024(UTC), what me worry? on 15/12/2024(UTC)
Thrugelmir
Posted: 15 December 2024 16:38:13(UTC)
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Nature of insurance cover required will depend very much on the trading activities of the company. If in doubt speak to a commercial mortgage broker to get you up and running.

Join a local business network group, such as a breakfast club. A good way of making contacts with reputable people in a variety of trades and services.
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3 users thanked Thrugelmir for this post.
Rob B on 15/12/2024(UTC), Jay P on 15/12/2024(UTC), Dentmaster on 15/12/2024(UTC)
ANDREW FOSTER
Posted: 15 December 2024 18:08:48(UTC)
#4

Joined: 23/07/2019(UTC)
Posts: 8,121
"If you moved from PAYE to Ltd what lessons learned can you share?"


You still need to run PAYE whether limited or not...

That has no bearing on being Limited or not.

As to the other questions, its hard to anser without knowing the nature of the business.



regarding company name, you can pick a name easily and there are hundreds of companies will regster it for very little money. I think the last one I did was about £75 with my chosen name,

I would advise choosing a Limited name than is quite generic and a business may take new directions that you don't know yet. So any old name can do but choose a suitable 'trading name' and multiple trading names if the business has multiple strands.
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Rob B
Posted: 15 December 2024 18:11:12(UTC)
#5

Joined: 07/10/2018(UTC)
Posts: 1,704
ANDREW FOSTER;328675 wrote:

"If you moved from PAYE to Ltd what lessons learned can you share?"


You still need to run PAYE whether limited or not...

That has no bearing on being Limited or not.

Let me rephrase. If you move from being permanently employed by a stable company to going solo under the wrapper of a Ltd Company.....

What lessons can you share. For example, is the best time to go at the end of the financial year?
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ANDREW FOSTER on 15/12/2024(UTC)
Dentmaster
Posted: 15 December 2024 18:12:17(UTC)
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Good luck . It depends on what the company trades. Will you have employees, premises etc . Also important to look at the most tax efficient way to pay yourself. If your running a car will the company own it, or will you charge the company.
I have run my Ltd Co for 28 years now, previously being a sole trader, and although its a bit more involved is certainly worth the effort
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Rob B on 15/12/2024(UTC)
Dentmaster
Posted: 15 December 2024 18:21:52(UTC)
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Having read your reply to Andrew, are you intending to do work for only one Company, but under the Ltd Co umbrella . If so I assume you are aware of IR35
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Rob B on 15/12/2024(UTC)
Rob B
Posted: 15 December 2024 18:25:31(UTC)
#8

Joined: 07/10/2018(UTC)
Posts: 1,704
Dentmaster;328677 wrote:
Good luck. It depends on what the company trades. Will you have employees, premises etc . Also important to look at the most tax efficient way to pay yourself. If your running a car will the company own it, or will you charge the company.
I have run my Ltd Co for 28 years now, previously being a sole trader, and although its a bit more involved is certainly worth the effort

Thanks, Dentmaster. It will be providing specialist services within the industry I currently work in (what I do is fairly niche so I'm being a little vague).

No need for premises. Will be WfH or in client offices (multiple clients). Unlikely to have staff but will retain that option with 100 company shares. Definitely travelling and hotels. IR35 under review. In essence it's my brain and what I do that I will be offering. Hence the PI.
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ANDREW FOSTER
Posted: 15 December 2024 18:49:06(UTC)
#11

Joined: 23/07/2019(UTC)
Posts: 8,121
Dentmaster;328678 wrote:
Having read your reply to Andrew, are you intending to do work for only one Company, but under the Ltd Co umbrella . If so I assume you are aware of IR35


I did work for a number of companies so wasn't under IR35

The company also bought and sold certain physical goods and offered some maintainance services on some servers etc. which again would make it not IR35

I used the Limited company as an umbrella for these partially unrelated activities.
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Hilda Ogden
Posted: 15 December 2024 18:54:54(UTC)
#6

Joined: 31/07/2023(UTC)
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ANDREW FOSTER;328675 wrote:
"If you moved from PAYE to Ltd what lessons learned can you share?"


You still need to run PAYE whether limited or not...

That has no bearing on being Limited or not.

As to the other questions, its hard to anser without knowing the nature of the business.



regarding company name, you can pick a name easily and there are hundreds of companies will regster it for very little money. I think the last one I did was about £75 with my chosen name,

I would advise choosing a Limited name than is quite generic and a business may take new directions that you don't know yet. So any old name can do but choose a suitable 'trading name' and multiple trading names if the business has multiple strands.

Bold text. Sorry, fact is that's simply untrue. There is no need whatsoever to pay a salary from a limited company. In fact my last business paid neither salary, nor dividends, nor corporation tax. And yes, it did trade.
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2 users thanked Hilda Ogden for this post.
Dentmaster on 15/12/2024(UTC), Tim D on 15/12/2024(UTC)
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