Would I be a Sole Trader or LTD?

square-pants

I've decided to set up a cleaning business, offering domestic cleaning at first, then tenancy cleaning, retail premises etc as I grow.

Initially it will be just me but I have the enthusiasm and passion to make it grow and take on other people at a later stage.

I've had a good look through this forum over the last week aswell as the Businesslink website, and it seems easier to set up as a sole trader....but I can't register a name for my business with Companies House unless I am an LTD.

I really want a business name as I think it will look more professional when trying to attract clients.

I've thought of a name for my business, it's not registered with Companies House and I want to start my business with this name on all my leaflets, website etc

So....if I register as a Sole Trader - can I trade using a business name? (the name I'd like to use is my 'county' then cleaning - like 'Midsummer Cleaning')

Am I allowed to trade using a business name if I am a sole trader? (advertise the name of leaflets, use it on invoices and receipts, open a bank account with the name etc)

And also if I can be a Sole Trader and use this name, what is to stop someone else registering as an LTD then registering my name with Companies House?

Really sorry if these are silly questions, I'm new to this. I'm used to being self-employed (I do a couple of MS jobs a month) - but this is my first steps to starting a business. I'm so excited about it all...we're going camping on Saturday for 9 days and I want to cancel the holiday and get started!

PlutoinCapricorn

Sole traders can certainly "trade as", although this does mean getting another bank account.

Some people in your position register a limited company just for the name and keep it dormant. Others don't care about duplicate names - if local the other people probably wouldn't want to be confused with you.

heretolearn_2

So....if I register as a Sole Trader - can I trade using a business name? (the name I'd like to use is my 'county' then cleaning - like 'Midsummer Cleaning') yes. Officially you would be Joe Bloggs trading as Midsummer Cleaning but you can use just the Midsummer Cleaning' part.

Am I allowed to trade using a business name if I am a sole trader? (advertise the name of leaflets, use it on invoices and receipts, open a bank account with the name etc) Yes. Bank account will usually be Joe Bloggs t/a Midsummer cleaning, but no need to mention it elsewhere and you can accept cheques etc just made out to Midsummer Cleaning.

And also if I can be a Sole Trader and use this name, what is to stop someone else registering as an LTD then registering my name with Companies House? Nothing, although 'passing off' is illegal (pretending to be you).

antrobus

heretolearn wrote: »

So....if I register as a Sole Trader - ...

There is no legal requirement to register anywhere as a sole trader, or as a partnership for that matter. (The closest you get is 'registering' with HMRC as self-employed, but that's only so that they can bill you for NIC.)

heretolearn wrote: »

....can I trade using a business name? ....

You can use any name you like. However if someone else is already using that name (or something similar) they could try and force you to desist. The same thing applies if somebody else later adopts your business name, or something similar.

Note that 'passing off' isn't 'illegal' per se, it's a matter of civil not criminal law.

square-pants

That's great news, thank you PlutoinCapricorn and heretolearn.

Is it easy to open a business banking account? Do I need to provide a business plan or forecasts? Is it costly? I don't want or need any credit from them, I'll literally be using it to accept payments in my trading name and to make purchases for stock.

P.S Just noticed your signature heretolearn, how are you getting on with the OU study? I did A103 and A215 too, now one course away from my degree but putting it on the back burner this year.

square-pants

antrobus wrote: »

You can use any name you like. However if someone else is already using that name (or something similar) they could try and force you to desist. The same thing applies if somebody else later adopts your business name, or something similar.

Note that 'passing off' isn't 'illegal' per se, it's a matter of civil not criminal law.

Thank you antrobus, so if I set up my business 'Squarepants t/a Midsummer Cleaning' and six months down the line someone else starts up an LTD and registers the name 'Midsummer Cleaning' at Company House would I be able to continue trading or have to change my name?

It's just that I'm really surprised that this name isn't taken - and I'm worried that if someone else who wants to start a cleaning company sees me trading with this name and realises that it's up for grabs after checking out Company House, they may register it.

phill99

Running a limited company is a lot more costly than running a sole traders (ie self employed)business. When I started my business, I started as a sole trader. I also registered the same name t companies house but didn't trade through it. Then , 2 years later when my turnover had increased significantly and my business risk had increased , I started trading through the limited company. As everything was the same, I didn't hae to change the signs on the van, change my business card etc. The only thing I had to change was my letterhead as this had to have the full company name and registered address.

When I was acting as self employed, I didn't even use t/a on any business stationary, cheque book etc. There is no legal requirement to do this.

Acc72

I would say start off as a sole trader and see how you go.

If you get to a stage when you are making decent profits (in excess of £25k), then speak to an accountant to see if it would be in your interests to become a ltd company at that stage.

Opening a business account is relatively easy to do - particularly if you do not want a loan (in this case, you will not need any forecasts or business plan etc.).

Your current personal bank should be your first port of call - as they already "know" you, and setting up the account should be easier.

The bank account will be in the name of say "John Smith trading as London Cleaners".

However, on any business cards / leaflets etc. you just say "London Cleaners".

How likely is somebody to take this name if nobody has thought of it already ?

If the Ltd company name is so special to you, then you could in theory register the name and leave the company dormant until such a time that it is required - although there will be expenses to do this.

Savvy_Sue

square-pants wrote: »

I'm so excited about it all...we're going camping on Saturday for 9 days and I want to cancel the holiday and get started!

:rotfl: don't do that, if your business takes off you may never have time to take another holiday again, and if it doesn't you may never be able to afford another holiday again!

antrobus

square-pants wrote: »

Thank you antrobus, so if I set up my business 'Squarepants t/a Midsummer Cleaning' and six months down the line someone else starts up an LTD and registers the name 'Midsummer Cleaning' at Company House would I be able to continue trading or have to change my name?

You'd be free to continue trading. Unless and until the directors of Midsummer Cleaning Ltd tried to take action against you. You'd have a good defence against them, because you'd be able to prove that you were trading as Midsummer Cleaning before they formed the company.

You can also object to a company name if you want to. There is even something called the Company Names Tribunal that deals with these kind of disputes.

square-pants wrote: »

It's just that I'm really surprised that this name isn't taken - and I'm worried that if someone else who wants to start a cleaning company sees me trading with this name and realises that it's up for grabs after checking out Company House, they may register it.

Then you do this:-

PlutoinCapricorn wrote: »

...Some people in your position register a limited company just for the name and keep it dormant. .

It's not that expensive to set up a limited company, £15-£20?? Then it's £15 a year for the annual return, and just a set of dormant company accounts which will be the same every year.