Registered a Limited Company - too hasty?

edited 30 November -1 at 1:00AM in Small Biz & Charities' MoneySaving
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timbstoketimbstoke Forumite
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Part of the Furniture 500 Posts
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I've been operating a small website for a couple of years now, strictly on a hobbyist basis - no advertising, no income. Currently, the domain and all other costs have just been run exactly as a hobby domain - i.e. bought and paid for from my own cash, with no accounts, tracking or anything else. It's now starting to gather traction and I've had some good suggestions for ways to add a couple of revenue streams, so I figured I should start separating it's costs from my own spending even though I'm probably still a year or so from making any more than the occasional beer from it.

Yesterday, on a whim, I registered a limited company through one of those "We do everything for a tenner" sites that make everything look so simple - and true to their word, that part was completely painless. But now I've done a little reading and I'm wondering if I'm going the right way about this. I wonder if some of the more experienced guys here can offer a bit of advice?
  • Do I need a business bank account? I've seen conflicting answers on this - some say a limited company is a separate entity and must have its own account, others say it's fine to use my own account as long as I record all business transactions.
  • Do I need an accountant? I'm going to count as a micro-entity for the foreseeable life of the business - even if it's a roaring success, a 6 figure turnover would be very optimistic for at least the next 5 years, and I'm looking at sustaining a year or two of loss first.
  • Is it even worth keeping a limited company, or should I just make it dormant? I set it up to try and separate business activities fairly early on, but I'm not sure it's the best way to go about it.
  • business costs/assets are basically a GSuite subscription, a couple of domains, a few software licenses, and some cloud hosting subscriptions (AWS, Google Cloud etc). Probably about £500pa all told. Right now that all goes from my personal account. How would I shift those costs to the business before it makes money? I assume I'd sell the domains etc to the company for a nominal fee, and loan it the money each month to pay the hosting costs?

I'm thinking that perhaps I got a little ahead of myself in my excitement to "make this a proper business" when I registered the company - but I'm here now and not sure where best to go next!

Replies

  • edited 28 April 2018 at 12:25PM
    00ec2500ec25
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    edited 28 April 2018 at 12:25PM
    timbstoke wrote: »
    Do I need a business bank account? I've seen conflicting answers on this - some say a limited company is a separate entity and must have its own account, others say it's fine to use my own account as long as I record all business transactions.
    does your next door neighbour pay for his purchases by drawing money out of your bank account? No of course not. A company is a separate legal entity, until you understand the implications of that you will make many mistakes such as thinking you can share bank accounts with your next door neighbour and record each others transactions "separately" when accounting for your respective legal/tax liabilities. There is no law that says a company must have a bank account, but then again there is no law that says "you" can breathe underwater
    timbstoke wrote: »
    Do I need an accountant? I'm going to count as a micro-entity for the foreseeable life of the business - even if it's a roaring success, a 6 figure turnover would be very optimistic for at least the next 5 years, and I'm looking at sustaining a year or two of loss first.
    this exact point was recently discussed and as you would expect a few well organised people said no, you do not. However, micro entity accounts are still statutory accounts and must be filed under the relevant reporting standard. Of course you can look them up and learn how to fill in boxes on forms, but a true business person realises when to focus on their own strength (generating business and growing) and when to delegate (pay an "appropriate" price for an "appropriate" expertise on a "mere" admin task)
    timbstoke wrote: »
    Is it even worth keeping a limited company, or should I just make it dormant? I set it up to try and separate business activities fairly early on, but I'm not sure it's the best way to go about it.

    business costs/assets are basically a GSuite subscription, a couple of domains, a few software licenses, and some cloud hosting subscriptions (AWS, Google Cloud etc). Probably about £500pa all told. Right now that all goes from my personal account. How would I shift those costs to the business before it makes money? I assume I'd sell the domains etc to the company for a nominal fee, and loan it the money each month to pay the hosting costs?

    I'm thinking that perhaps I got a little ahead of myself in my excitement to "make this a proper business" when I registered the company - but I'm here now and not sure where best to go next!
    next you go see an accountant and get full advice based on a review of your full facts, not the few snippets you have posted here. You have not even touched on your personal income requirements and thus whether a company would be a useful tax haven for money you don't currently need.
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