Registering a Business Name as a Sole Trader

Emma_Salmon

Hi,

My partner will eventually wantd to start his own company and at present the name he wants for his company is available at Companies House, is there anyway to secure this with out "officially" setting up the company?

He is a painter and decorator and currently self employed but would like to venture out on his own, would he be able to used a company name without it being registered for private work?

Also from reading the posts I take it he does not have to register for VAT as he will not be recieving more than £68k a year, would this have any implications on advertising his services. We really don't want to look like cowboys and he is really very good at what he does!

I am sure these queries have already been covered but I am getting myself in a muddle.

Thanks in advance,
Emma

Tozer

Regarding the name, start a non-trading (shelf) company and change its name to the desired name.

blue_monkey_2

As he is a sole trader he can name the company what he wants but cannot use the words Ltd for example. So if he has seen J S Painting Ltd he can by all means call himself J S Painting but you need to check there is no-one else locally with the same name. Nothing legal but it just makes sense and avoids confusion.

I use my own and my Trading As name - both are on my business account and card, but he has to tell Inland Revenue what he is trading as if this is the case. There are a few rules such it cannot be offensive and the like: http://www.businesslink.gov.uk/bdotg/action/detail?r.l1=1073858805&r.l3=1073859929&r.lc=en&type=RESOURCES&itemId=1073788944&r.l2=1073859131&r.s=sc

There is more information on there if he wants to register a company - this is a different thing altogether though and you can find information on that on Business Link.

There are lots of self employed people who are not registered for VAT, to be honest it is more favorable for the householder employing him if he is SE as they will not have to pay the additional 15% that a VET registered company would charge (JS Painting Ltd would charge £115 but JS Painting would charge £100). Unless he is doing a lot of work for a business then it will make no difference. He will not look like a cowboy. He will look like a P&D who is working for himself.

For registering for VAT it works on a rolling year so it goes from wk 1 - 52, wk2 - 1, wk3 - wk2, etc... it is not for a years trading but on a rolling year, week on week, so please be aware of this OK. Business lInk has lots of info, go through them all using the link I posted above.

The most important thing is for him to call HMRC and register as self employed, he has to do this within 12 weeks or get fined. He could do this now even before he has started working for himself though.

Good luck.

blue_monkey_2

Just to add, he can have a company name and be a sole trader, there is no need for him to register a company name at all. Only a registered company cannot have the same name as another registered company. If you see what mean.

If you register it will make your life a lot harder and will cost you more as you'll have to pay an accountant and have to be audited and you have to file your accounts with companies house (there is a charge for that too). There is realy no need for a 'one man band' to have a registered company, especially if he is earning under the threshold.

Another thing to remember: His reputation will get him the work, not the name of his company!! Word of mouth will get him the work! If you have a local 'Freecycle Cafe' sign up and post on there as it is free, then if he does a good job the work will start to come in as people locally will recommend him.

Emma_Salmon

Thanks so much for the advice, he is registered with the HMRC and is currently paying NI and tax through his current employer and does have an accountant.

Basically we don't want someone to have the same name (it is very cool, hence not mentioning it) and we are very surprised someone does not already have the name and so if he registered as a sole trader (non-trading ltd) would he still have to produce accounts to companies house?

Tozer

Just to clarify the above posts, whilst you can have a business as a sole trader (or partnership for that matter), you cannot have a company as a sole trader.

You can have a "Trading name" both as a sole trader or as a company. By way of example, you could have a company called "XYZ Limited trading as "Great Painters".

The Companies Act 2006 requires various information to be put on all stationery (e.g. registered office, registered number, etc).

All private companies must end in "Limited" to demonstrate that there is limited liability.

Tozer

Emma_Salmon wrote: »

Thanks so much for the advice, he is registered with the HMRC and is currently paying NI and tax through his current employer and does have an accountant.

Basically we don't want someone to have the same name (it is very cool, hence not mentioning it) and we are very surprised someone does not already have the name and so if he registered as a sole trader (non-trading ltd) would he still have to produce accounts to companies house?

You also need to look to see if there is a trademark registered.

Just because you take the name of a company, this doesn't necessarily stop you being sued for using it in the future if someone can show that you are infringing their registered or unregistered trademarks.

Tozer

Oh, and as for the question about accounts - you simply tell companies house that the company is dormant and so no accounts have been produced.

You do, however, have to provide an Annual Return (nothing too difficult to complete).

zfrl

I think what you want to do is own the limited company name but run a business as a sole trader. This will ensure that nobody else sets up as the ltd co name. I think this can be done but not sure how. I know it used to be easier to buy a non trading ltd company then change its name.
I'm sure others will help. It can get very confusing as being self employed or limited makes no difference to VAT is it based purely on turnover (NOT profit).

Good luck - also get the domain name asap!

Ste_C

blue_monkey wrote: »

There are lots of self employed people who are not registered for VAT, to be honest it is more favorable for the householder employing him if he is SE as they will not have to pay the additional 15% that a VET registered company would charge (JS Painting Ltd would charge £115 but JS Painting would charge £100).

It would make no difference. You don't have to be VAT registered if you're a Ltd company. It would still be £100 regardless of whether he's a sole trader or running the business as a Ltd company.

blue_monkey wrote: »

If you register it will make your life a lot harder and will cost you more as you'll have to pay an accountant and have to be audited and you have to file your accounts with companies house (there is a charge for that too). There is realy no need for a 'one man band' to have a registered company, especially if he is earning under the threshold.

There are extra fees - annual returns at £15 per year, but it costs nothing to file annual accounts, unless you file them late in which case you'll be fined. There is also much more legal paperwork and other rules which must be followed. But he would not have to be audited and he would not have to use an accountant. There is no legal requirement for Ltd company accounts to be prepared by an accountant and a one man band doing painting and decorating turning over less than £68k would definitely not have to be audited!

Emma_Salmon

Thanks again! I am working on the domain name as we speak! I was worried that companies house would be just as difficult but glad to see its not so simple to just set up the name.

I really can't express how much I appreciate the advice, my partner has finally found a profession he really enjoys!