Credit nightmare for Ltd company

mum24

Hi,

We have been trading as a sole trader since 2004 and, at that time, opened a dormant Ltd company ready to use if we ever went Ltd (as advised by our accountant). Then, in Jan 2009, we did go the Ltd route (again, as advised by our accountant). We are now having huge difficulty in obtaining credit as we are still listed as dormant with Companies House and they say we will remain that way until they get the first set of accounts for our Limited Company which may well not be until late Summer.

We have just been turned down for credit because of this by a mobile phone company. Surely, there must be a way of obtaining credit for a Ltd company before it will have effectively been trading for 18 months?

Tearing my hair out.......

more_money_for_me

Certainly the company I work for is wary of new Ltd companies. They cost next to nothing to set up, and of course the directors are not personally liable for the debt, unless you want to go through the courts and prove something untoward has happened. I think people are just protecting themselves. How about a personal guarantee, that you will underwrite any company debts?

TM1976

Previously you were trading on your own personal credit rating and take liability. Why not just take out you phone contract personnally and recharge it to the company, then in 18 months time when you have filed accounts change it over?

mum24

Thanks for your replies.

"More Money for Me", unfortunately the mobile phone company concerned will not even consider our company for credit, even if we underwrite the risk personally - we've offered bank letters and letters from our accountant but they won't entertain the idea.

"TM1976", I think your're probably right. Not being very accountancy minded, if we were to take the phones out in our own personal name, and then transfer the money for the bills from our company account to our personal account, would that count as personal income? Also, would we be able to reclaim the VAT, being VAT registered?

TM1976

Just enter the invoice like it's an invoice for the company and repay yourself for what you have paid.

There is no implication for your own income as the net effect will be nil. As long as you have a valid VAT receipt and you can establish that the Ltd Co. has in substance met this cost you can claim VAT.

paulwf

I got a Virgin Liberty SIM on my newly formed Ltd without any problems. Everything was just transferred from over from my personal account so not sure if that had any bearing.

The liberty SIM relies on you supplying the phone so there isn't a 18 or 24 month lock in so very low risk for them if you default...I have a £100 credit limit, more than enough as £10 gives 200 minutes and unlimited texts.