Question about ltd co. and business bank acc.

Snooze

Hi all,

If you set up a ltd co. with yourself as the sole director (no shareholders or anything) do you have to have a business bank account attached to it in the same name? I already have 'access' to another business bank account which, while not in my name, is run as my own account and is currently used to deposit the funds from a little side line business I have. I'd like to use this account for my ltd co. Can that be done?

The cut a long story short, I have strong concerns that an application for a new business account in my own name would be rejected due to an ongoing battle with a financial institution who have taken it upon themselves to blacken my credit file when in actual fact I owe them nothing at all. The case is currently going through court but there's no chance of it all being sorted out before I need to set up this company.

Thanks for any help.

LittleVoice

Snooze wrote: »

Hi all,

If you set up a ltd co. with yourself as the sole director (no shareholders or anything) do you have to have a business bank account attached to it in the same name? I already have 'access' to another business bank account which, while not in my name, is run as my own account and is currently used to deposit the funds from a little side line business I have. I'd like to use this account for my ltd co. Can that be done?

The cut a long story short, I have strong concerns that an application for a new business account in my own name would be rejected due to an ongoing battle with a financial institution who have taken it upon themselves to blacken my credit file when in actual fact I owe them nothing at all. The case is currently going through court but there's no chance of it all being sorted out before I need to set up this company.

Thanks for any help.

If there are no shareholders, what sort of limited company do you think you would set up? Private limited companies (ltd) are limited by shares as are public limited companies (PLC). (A company limited by guarantee is unlikely to be what you want.) Even if you are the only director and shareholder, the company will have a shareholder. The company is still separate from you.

If the company is trading, how will it be paid? If it were to have a trading name, payments could be made in that name.

To open an account for a limited company, you are not applying for one "in my own name". You are not the company.

paddyrg

Although they may look more favourably if the directors have personal accounts with them that have been held in good standing for a while.

Snooze

LittleVoice wrote: »

If there are no shareholders, what sort of limited company do you think you would set up? Private limited companies (ltd) are limited by shares as are public limited companies (PLC). (A company limited by guarantee is unlikely to be what you want.) Even if you are the only director and shareholder, the company will have a shareholder. The company is still separate from you.

If the company is trading, how will it be paid? If it were to have a trading name, payments could be made in that name.

To open an account for a limited company, you are not applying for one "in my own name". You are not the company.

If there are no shareholders then it is limited by guarantee, so why would you think that "is unlikely to be what you want"?

You last paragraph makes no sense. You can't open an account solely in a trading name (ie. you can't put Snooze Ltd as the first and second names of the account holder), there has to be a real person behind the name, which is where the problem comes in.

chalkie99

"Limited by Guarantee" is for charitable institutions, non-profit organisations, etc.

If you set up a Ltd co for a business venture you must allocate shares, even if you allocate them all to yourself..

The ltd co is a separate legal entity in it's own right and you must set up a bank account in the ltd co name. If you don't then you will be diverting money that belongs to that ltd co elsewhere which is illegal.

Your credit rating may hinder you as the bank will run a personal check on the directors when considering the application.

Are you sure you really need a ltd co? Get a free consultation with an accountant to see if it really is your best way forward.

LittleVoice

Snooze wrote: »

(1) If there are no shareholders then it is limited by guarantee, so why would you think that "is unlikely to be what you want"?

(2) You last paragraph makes no sense. You can't open an account solely in a trading name (ie. you can't put Snooze Ltd as the first and second names of the account holder), there has to be a real person behind the name, which is where the problem comes in.

(1) I mentioned the limited by guarantee company in a (somewhat failed) attempt to prevent someone mentioning that there are such things as companies which don't have shares! The "it is unlikely" was obviously too subtle.

(2) Why doesn't my last paragraph ("To open an account for a limited company, you are not applying for one "in my own name". You are not the company.") not make sense?

If you were actually referring to my penultimate paragraph, payments can be made to a trading name. Are you denying that fact?

scheming_gypsy

Made sense to me; you see cheques with Jimmy Jimbob t/a Jimmy's Shop and Stuff

Snooze

chalkie99 wrote: »

"Limited by Guarantee" is for charitable institutions, non-profit organisations, etc.

Sorry I'd actually misread what it said for that on a company formations website. You are indeed correct.

If you set up a Ltd co for a business venture you must allocate shares, even if you allocate them all to yourself..

The ltd co is a separate legal entity in it's own right and you must set up a bank account in the ltd co name. If you don't then you will be diverting money that belongs to that ltd co elsewhere which is illegal.

Your credit rating may hinder you as the bank will run a personal check on the directors when considering the application.

Are you sure you really need a ltd co? Get a free consultation with an accountant to see if it really is your best way forward.

It's actually contracting direct with an agency who are rather surprisingly willing to pay what I want so it's worth doing. There's no chance of contracting direct to the client so it's either this or not at all.

The agency only offers payment via umbrella or ltd co. As the contract is worth around £50k per year I did some research on the pros and cons of umbrella vs ltd and on a rough back-of-a-beermat calculation I'd be around £6k better off via ltd co.

Now, I have sole access to a business account (my name is not the account holder name) as Snooze IT Solutions (not the real name, just for exemplary purposes) and I am wondering if I could set up a ltd co. namely Snooze IT Solutions Ltd with my real name as director (obviously) and then link the Snooze IT Solutions business bank account to it without any issues?

I've thus far been unable to find any literature online stating that a business bank account holder name must match that of the sole director of a ltd co. :think: If anyone is aware of such literature detailing this then I'd appreciate the link to it so I can have a read.

Thanks.

Snooze

scheming_gypsy wrote: »

Made sense to me; you see cheques with Jimmy Jimbob t/a Jimmy's Shop and Stuff

Exactly my point : you need to put the real name of the account holder. You can't just open a business account with "Jimmy's Shop & Stuff" as the first and second name of the account holder.

scheming_gypsy

A quick check comes back with... Sole trader you can have trading as, whereas for a limited company you need the bank account in the company name.

If you are a sole trader you can open an account that will have your name and trading style i.e. John Smith T/A Smith A1 Business Services (T/A means ‘trading as’). This way gives you a more professional look by having a Business Names, and will also allow you to ask for cheques to be written in your business name only i.e. ‘Smith Business Systems’ (even if doing so will annoy your bank).
If you intend, or have, created a limited company you will want to open an account in the name of say ‘Smith A1 Business Services Limited’. You will need to have your limited company set up before your visit to the bank.

http://www.bizhelp24.com/money/opening-a-small-business-bank-account.html

Snooze

scheming_gypsy wrote: »

A quick check comes back with... Sole trader you can have trading as, whereas for a limited company you need the bank account in the company name.



http://www.bizhelp24.com/money/opening-a-small-business-bank-account.html

I know that already but it doesn't answer my question.