How to? Create a viable Ltd company…

[Deleted User]

I currently have a partnership business and obviously this entails me also being “self employed”. Our business is partnered by myself and my wife. We are establishing the business, it makes a very small profit and I work in full time employment as well to support our lifestyle.
We want to expand the business and primarily I need to buy a new vehicle and a new unit (as in a trailer). We normally purchase everything under our own names, however as this is business related I’m thinking that we should look at the limited company route.
My question is how and where do we start? If I open the limited company today, it’s clear that we won’t get finance due to the credit history and so on… So what should the first steps be, how do we build the company some history and how do we get the company a bank account (we currently have partnership accounts)
I’d appreciate any help or advice that anyone could give. My main reason for wanting the ltd company is for limited liability and also to protect us should the business have something terrible happen (not that we would ever willingly allow this).

paddyrg

Even when established, you normally need to underwrite any credit to the company with assets. When the company is big enough to own useful loanable assets, you'll be able to get credit lines without personal guarantees. The very nature of limited companies that you mention (limiting the liability, closing the company) is why they make poor bets for straight unsecured credit!

Is that any help?

[Deleted User]

It does help me thanks, however I can't say it was what I was lookig for :-/

I wanted to take out loans in the business name to build the Company, I knew this wasn't possible right away, however I was thinking I could build a profile for the company with a view to this.

So it looks like the only benefit for me and my wife would be the protection from liability, i.e. court claims etc ...

Prothet_of_Doom

assj wrote: »

.

So it looks like the only benefit for me and my wife would be the protection from liability, i.e. court claims etc ...

There are taxation benefits too.

paddyrg

Of course it'll vary case by case, but if you have good personal credit histories and some assets to back you up your bank may take a different line after a few years of improving business, but it's far from guaranteed. One thing you may be able to borrow against may be future contracts and invoices - are there any longer-term deals you can do in the name of the company which have contractual obligations for future payments which you can ask the bank to lend against?

chalkie99

Approach your existing bank for an account for the Ltd.

The bank will credit check all the directors of the new Ltd company and, subject to those, will consider loans to the Ltd. company account although they will almost certainly require personal guarantees.

One thing you need to consider is the tax implications of the vehicle and it's insurance. If the vehicle is insured in the company name you will need to start over again with no claims discount and you will need to find an insurer who accepts the ownership/registered owner/main driver situation.

[Deleted User]

I suppose that's my main concerns right now. I need to buy a much larger car (not quite a van) and a new trailer asap.

Without these aspects we cannot grow and cannot offer the best services.

So how do I do this? I can't think of a "great" option now :-/

paddyrg

Sleeping partner investor?

[Deleted User]

Well that would be great - having said that I have no idea where and how to source one and if I'm honest I don't know if they would invest in our business.

colino

At present you sound as if both you and your Wife are self-employed in the same business and it is an informal business partnership, not a LLP. I see no point in becoming an LLP, or a Limited Company for that matter, as it seems it will still be a relatively simple, small business. No point being incorporated if the bank asks for personal guarantees!
Speak to a recommended local accountant for the next step, you could even buy the vehicle privately and bill the business entity for its use.
Please never have your personal banking at the same bank where you do business though.

Atidi

assj wrote: »

I currently have a partnership business and obviously this entails me also being “self employed”. Our business is partnered by myself and my wife. We are establishing the business, it makes a very small profit and I work in full time employment as well to support our lifestyle.
We want to expand the business and primarily I need to buy a new vehicle and a new unit (as in a trailer). We normally purchase everything under our own names, however as this is business related I’m thinking that we should look at the limited company route.
My question is how and where do we start? If I open the limited company today, it’s clear that we won’t get finance due to the credit history and so on… So what should the first steps be, how do we build the company some history and how do we get the company a bank account (we currently have partnership accounts)
I’d appreciate any help or advice that anyone could give. My main reason for wanting the ltd company is for limited liability and also to protect us should the business have something terrible happen (not that we would ever willingly allow this).

assj wrote: »

I suppose that's my main concerns right now. I need to buy a much larger car (not quite a van) and a new trailer asap.

Without these aspects we cannot grow and cannot offer the best services.

So how do I do this? I can't think of a "great" option now :-/

Go on, I'll bite. :cool:

Perhaps you could cut down on the sizes of those candy floss portions, and be careful how many free onions you give away with those burgers, and I'm sure with these economy measures you'll soon be able to afford that nice big car and trailer.

You can set up a limited company online for £20 or less. Most of the websites will also throw in a business bank account too if needed (subject to acceptance). Some even offer up to £50 cashback if you take up the business account offer. Perhaps you could use that as the deposit?

:rotfl: